At the conclusion of the annual Bastille Day Parade, Olmert and Assad stood about a metre apart on a grandstand set up at the Champs-Elysees, greeting other leaders but also obviously very aware of each other's presence.

As Assad moved to his left, Olmert gravitated in that direction as well. All the while, Assad pretended Olmert wasn't there.

At one point UN Secretary General Ban Ki-Moon motioned to Olmert to come to shake Assad's hand, but Olmert raised his hands as if indicating that if Assad wasn't interested, neither was he.

While Olmert was hugging Egyptian President Hosni Mubarak, Assad passed directly behind him, and the photographers, realising that the potential of a historic picture was within their lenses, shouted "Ooh la la".

But Olmert did not turn around, Assad did not tap him lightly on the shoulder, and the Mediterranean Union summit ended without the much anticipated historic handshake.

Likud MKs criticised Olmert and Livni for their pursuit of Assad at Monday's Likud faction meeting.

"What happened in Paris was shameful," MK Yuval Steinitz said. "The prime minister and the foreign minister were both running after the Syrian dictator to try and shake his hand. Their behaviour humiliated the State of Israel and the entire Jewish people."

Israel is closely following movements by the Lebanese Armed Forces, which recently paved a road and began constructing a number of military posts in the Shaba Farms/Mount Dov area for the first time since Israel's withdrawal from that part of Lebanon in 2000.

Explanations for the unprecedented move differ in the IDF, with some high-ranking officers raising concerns that the posts being built by the LAF will become borderline positions that can facilitate Hezbollah in future attacks against Israel.

"In the event of a war with Israel, LAF positions could be used by Hezbollah, since many of them are situated where Hezbollah outposts used to be," one senior official said.

Another interpretation of the move by officers in the IDF Foreign Liaison Unit was that the LAF was making a claim of ownership over the area, doing what Israel has asked it to do for the past 30 years - to take control of southern Lebanon.

"It is in Israel's interest that Lebanon deploy its military throughout the country," one senior IDF officer said.

Concern has grown since Sunday when Lebanese President Michel Suleiman said that should diplomacy fail to return "Israeli-occupied land" to Lebanon, the LAF will take it by force.