Syrian President Bashar Assad had previously stated that Israel would have to be willing to withdraw from the Golan Heights in order to launch negotiations.
"I told the Syrians we were ready to renew negotiations without preconditions," Netanyahu said during a Knesset Foreign Affairs and Defense Committee meeting.
"They replied that they were willing but we would first have to withdraw from the Golan Heights."
He added, "Sarkozy got back to me and said they were willing to relinquish the precondition, but that they didn't want direct negotiations. They want mediation. I told him I preferred direct talks, but if we must have a mediator he (Sarkozy) should mediate."
Recently Turkey has expressed willingness to act as mediator between the two parties, but Netanyahu has hinted he would not accept such a proposal because Turkish Prime Minister Recep Tayyip Erdogan "is not an impartial mediator".
Netanyahu suggested France as an alternative, but Assad has insisted that Turkey mediate.
In his speech before the committee, Netanyahu also referred to Minister Binyamin Ben-Eliezer's recent visit to Turkey. "His trip caused a moderation and closeness of ties with them," he said.
Roni Sofer contributed to this report