Ben Caspit, a rather well informed journalist at Maariv (no English links, I think) says that the top military brass is warmly suggesting to Olmert that he reach a deal with the Syrians. The thesis: The Palestinian track is a waste of time since no agreement can be reached and even if it could be, it could never be implemented by the Palestinians side (sides). On the other hand, an agreement with the Syrians is already almost fully formulated. The reason to go that way is that the Syrians are crucial to the Iranian efforts to cause mischief in Lebanon, Gaza, and even in Syria itself, much of the weaponry and support come from Iran. Remove the Syrians from the Iranian side of the equation and it collapses, or at any rate will be dealt a heavy blow.
I haven't the faintest idea if he's right or not.