A prominent US senator said Wednesday that Syrian President Bashar Assad told him last month in Damascus that Syria is prepared to resume peace negotiations with Israel and embrace a 2000 Arab initiative offering peace in exchange for the Golan Heights. "Syria would like direct American participation in these peace talks," said Sen. John Kerry, a Democrat and chairman of the Senate Foreign Relations Committee. Reversing the Bush administration's dismissive stance on Syria, Secretary of State Hillary Clinton announced Tuesday during a visit to Israel she would send two senior officials to Damascus this week. Endorsing President Barack Obama's decision to dispatch the US envoys to Damascus, Kerry said Assad was looking past Iran to improved relations with Arab countries and with the West. Kerry said that Assad "told me recently in Damascus he is prepared to resume peace negotiations with Israel and embrace the Arab Peace Initiative once again." Kerry's February trip to Damascus appears to have been a precursor to Clinton's move, but Kerry had not previously revealed the details of his talks with Assad, saying only the Syrian leader offered prospects of "real cooperation." Kerry warned that Syria will "still try to play both sides of the fence for as long as it can." But Kerry said he believed Assad understands its "long-term interests lie not with Iran, but with its Sunni neighbors and the West." Similarly, Israeli officials have expressed interest in peace talks with Syria. Speaking at the Saban Center for Middle East peace, a private think tank, Kerry said Wednesday that the US should act on Assad's interest in direct US participation in peace talks with Israel. "We should play that role if our presence can move the process forward," he said. Kerry also proposed the United States provide "financial incentives" to encourage Syria to make peace with Israel. The two countries last held peace talks in January 2000 under the supervision of President Bill Clinton. More recently, they have been holding indirect talks through Turkey - over Iran's objections, Kerry said. Syria has been a close ally of Iran and is believed to be a conduit for the delivery of Iranian missiles and other weapons to anti-Israel terrorist groups. "We should have no illusion that Syria will immediately end its ties to Iran," Kerry said, "but that shouldn't threaten us as long as their relationship ceases to destabilize the region." It benefits Syria if Assad looks west for new relationships, Kerry said. "The sanctions can always be tightened again if Syria backtracks," he added. Ticking off what he considered to be "causes for hope" for peace in the Middle East, the 2004 Democratic presidential candidate said the first was a shift in Middle East geopolitics. The rise of Iran, Kerry said, had created an unprecedented willingness among moderate Arab nations to work with Israel. "This realignment can help lay the groundwork for progress towards peace," he said. "Moderate Arab countries and Israel alike are actually more worried about Iran than they are about each other," he added. At the same time, Kerry said US opposition to new Israeli settlement activity has "usually existed on paper alone." "We will defend Israel's security unflinchingly," Kerry said. But, he said, the settlements are fragmenting a future Palestinian state and complicating the work of Israel's defense forces. Jpost.com staff contributed to this report.