Israeli Prime Minister Ariel Sharon poured cold water on the prospects of a peace deal with Syria Wednesday, accusing Damascus of "influencing terror" against the Jewish state by sheltering the leadership of Hamas.

Sharon said in an interview with the Jerusalem Post that recent reported declarations by Syrian President Bashar al-Assad that he wanted a peace deal were a public relations gesture and that he had to show real intent by shutting down the offices of hardline Palestinian factions based in Damascus.

"Syria is a factor which influences the terror against Israel," Sharon told the English-language daily.

"The headquarters for terrorist organizations -- Hamas, Islamic Jihad, the Popular Front (for the Liberation of Palestine or PFLP), and a number of others -- operate in Damascus. The orders are given from there (for anti-Israeli attacks), and reports are sent back there."

His comments also appeared to kill off prospects of progress towards a peace deal with Syria, sparked by a report this week that Assad recently told visiting former US diplomats he would be ready to resume negotiations with Israel if Sharon would similarly oblige.

"Syria is under US pressure today because of its position on Iraq, and because it allows terrorists to go through its territory on the way to Iraq," Sharon said.

"So it is clear to me that the Syrians, in order to make life easier for themselves, find it convenient to say there are contacts, negotiations."

In an attempt to prevent Hamas firing more of its makeshift Qassam missiles into southern Israel, troops staged an overnight incursion into the northern Gaza Strip.

About 20 tanks accompanied by bulldozers and backed by attack helicopters entered the eastern part of the town of Jabaliya and took up positions near the limits of the town of Beit Lahya and on hills.

The nearby town of Beit Hanun was surrounded by Israeli troops and its residents prevented from leaving the area, Palestinian security sources said.