Assad faces dilemma in peace talks: Syria will not cut its own deal with Israel, but wants a wider solution, writes Robert Fisk

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FROM his massive presidential complex on the hills above Damascus, Hafez al-Assad can gaze south-east towards the snows of Golan. For the first time in a quarter of a century, the Israeli occupation of the heights appears to be less permanent than the frost which never melts, even in the warmest of summers.

'Withdrawals' is the word the Israelis are using in their Washington peace talks with President Assad's delegates. 'Comprehensive solution' is what the Syrians say by way of reply: Israeli withdrawal from all occupied Arab land. Even for those mystical heights, a symbol of both humiliation and shared suffering for Syrians, President Assad will not cut a separate deal with Israel.

It has become the cornerstone of Syrian foreign policy, defended in every discussion with foreign dignitaries, on every news programme, in every Damascus editorial. When Yasser Arafat, on the eve of a visit to Damascus this month, suggested Syria might conclude a bilateral agreement with Israel, an enraged Mr Assad announced he no longer had time to meet the PLO leader. Hadn't Syria always insisted it was the vanguard of the Palestinian cause, and stood in the 'same trench' as the Palestinians?

In 1982, Syria concluded a ceasefire with the Israelis in Lebanon and left the Palestinians to fight on alone in Beirut, albeit after the destruction of almost the entire Syrian air force and all its missile batteries in Lebanon. Mr Assad believes he was tricked into the truce by the late Philip Habib, the US mediator, and the moral he drew was a familiar one: never again. Yet there are more important and less altruistic reasons for Syria's determination to demand all or nothing from the Israelis.

Syria's economy is flourishing, its oil output stands at more than 500,000 barrels a day, foreign companies are queuing to invest while Saudi and Kuwaiti loans - payment for Syria's participation in the coalition against Iraq - are subsidising new industry and communications. Amnesty International names 1,500 political prisoners in Syria, but there is less surveillance and less censorship. Fax machines, the technological nightmare of every dictatorship, can now be imported. The smell of money is real.

But equally real is the steady ascendancy of Islam. The Syrian regime is still haunted by the savage 1980-82 Muslim Brotherhood uprising which was repressed in the bloodbath at Hama, and President Assad, according to those who have met him these past weeks, is absorbed by the religious movements which are changing the Middle East. When Roland Dumas, the French Foreign Minister, visited the President, Mr Assad spent hours discussing fundamentalism. By way of accommodation, he has increased the amount of religious broadcasting on Syrian television and ordered the building of new mosques, particularly in the Alawite mountains from which he comes. The most impressive mosque has been built in the President's home village of Qurdaha. Yet even official preachers in the mosques, speaking of morality, have been heard using the word jihad. Mr Assad realises that his decision to join the Gulf war coalition was deeply unpopular among Syrians. He knows that a betrayal of the Palestinians would initiate a whirlwind of discontent within his country, a gale force wind which would blow from the mosques rather than the streets.

President Assad faces a turning point. If the New World Order once appeared to promise peace, the view from his presidential palace is far from comforting, even when he looks away from the heights of Golan. To the east, Iraq is threatened with dismemberment, a frightening precedent for Syria, however deep the enmity between Saddam Hussein and Mr Assad. To the south, King Hussein of Jordan is attempting a recovery from cancer and may have only a year to live. Few Arabs would trust the Israelis not to exploit the King's death and claim that a Palestinian state exists in Jordan.

To the north, a potentially expansionist Turkey, heavily armed and now making regular military raids against Kurdish guerrillas deep into the north of Arab Iraq, offers little compromise over the flow of the Euphrates waters into Syria. And in the west, Lebanon, that most precious and most perilous of Syria's Arab neighbours, walks from its civil war on crutches, its new parliament safely pro-Syrian but its Christian Maronites contemptuous of Syria's stewardship and its new Prime Minister, a Saudi citizen.

The Syrians are planning to withdraw their troops from Beirut before Christmas - but not from Lebanon. 'The Lebanese army is not yet ready to keep order,' a Syrian official said uncompromisingly this week. 'We know that there are still guns in every home and in every street.' President Assad knows, too, that this applies to the towns of upper Egypt where Islamic revolution continues to ferment. Far to the west, in Algeria, an old and trusted ally, a nationalist government is already at war with an Islamic guerrilla army.

'Abu Basil' is how Mr Assad now likes to be called - 'Father of Basil', the horse-riding soldier- son who is being gently groomed for leadership - and his personal prestige appears untouched by the return of his ne'er-do-well brother Rifat. But Arab nationalism is declining as the Islamic renaissance extends its influence. The ghosts of Hama have not been laid. For President Assad, a separate, bilateral peace with Israel would probably mean national catastrophe as well as political suicide.