In an interview with Reuters, The regime's Intelligence Minister Katz described endorsement of Israel's 51-year-old hold on the Golan as the proposal now "topping the agenda" in bilateral diplomatic talks with the United States, reported Middle East Eye.
Any such move would be seen as a follow-up on the US exit from the international nuclear deal with Iran and President Donald Trump's recognition of Jerusalem as the capital of Israel and the opening of a new US embassy there this month.
Trump's moves were hailed by Israel and caused deep concern among major European allies of Washington.
There was no immediate comment from the White House on Katz's remarks.
The Golan Heights, Syrian territory illegally occupied and subsequently annexed by Israel, form a strategic plateau between Israel and Syria of about 1,200 square km.
It was part of Syria until Israel captured it in the 1967 Middle East War. Israel moved settlers into the area that it occupied and annexed the territory in 1981 in a move not recognised internationally.
Katz, a member of Prime Minister Benjamin Netanyahu's security cabinet, cast the Golan proposal as a potential extension of the Trump administration's confrontational tack against Iran, Israel's arch-enemy.
"This is the perfect time to make such a move. The most painful response you can give the Iranians is to recognise Israel's Golan sovereignty - with an American statement, a presidential proclamation, enshrined [in law]," he said.
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