(Reuters) - Israeli Prime Minister Benjamin Netanyahu denied a newspaper report on Friday that said he had agreed in principle to hand back land annexed from Syria as part of secret U.S.-mediated peace talks that broke off last year.

Syria has long set a complete withdrawal from the Golan Heights as a condition for making peace with the Jewish state. Israel captured the strategic plateau in a 1967 war, then annexed it in 1981 in a move not recognized internationally.

Israeli leaders had consented to at least partial Golan pullbacks in past talks with Syria, though none had gone as far as Netanyahu in agreeing to withdraw to the northeastern shores of the biblical Sea of Galilee, the mass-circulation Yedioth Ahronoth daily said.

The newspaper quoted unspecified American documents as saying Netanyahu had expressed such a readiness, surprising U.S. diplomats during indirect contacts they mediated with Syria two years ago.

These contacts broke off early in 2011 as unrest spread across the Arab world, eventually sparking a full-blown revolt against Syrian President Bashar Assad.

Netanyahu's office said the suggested withdrawal had been a U.S. initiative that Israel had never accepted and dismissed the report as "politically-motivated", citing the fact that it was published just days after the right-wing leader announced he would move up national elections to early next year.

"This was one initiative among many proposed to Israel in recent years. At no stage did Israel accept this American initiative. It is an old and irrelevant initiative," Netanyahu's office said in a statement.

The last formal Israeli-Syrian peace talks, sponsored by Washington, broke off more than 10 years ago and repeated efforts to revive them through contacts and indirect meetings them have failed to yield any breakthroughs.

Israel