According to the report, the move has cast doubt over the future of a UN peacekeeping force on the strategically vital plateau.
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Western diplomats said the Syrian redeployments near the Golan ceasefire line were the most significant in 40 years.
According to The Guardian, rebel groups have moved into the vacuum sparking fears in Israel that jihadists will use the area as a staging ground for attacks on territory it controls.
Evidence that surfaced in the past year suggests that rebel ranks have been filled with Islamist extremists including al-Qaeda members who seek to establish a new foothold in Syria.
Israeli soldier overlooks Syrian side of border (Photo: EPA)
The Guardian explained that the eastern border of the Golan Heights was until recently thought to be occupied by four Syrian army divisions whose positions helped make the Golan the safest of Israel's four borders for more than four decades.
"They (the Syrian government) have moved some of their best battalions away from the Golan," said a western diplomatic source of the Syrian changes. "They have replaced some of them with poorer-quality battalions, which have involved reducing manpower. The moves are very significant."
The report further quoted a senior Israeli government official as saying "UNDOF is of the highest importance, now more than ever. We know some participant countries are having second thoughts and we're concerned about that.
"We are talking to them to try to understand what they plan on doing if the going gets rougher. We know some are hesitating, and it's a problematic situation."
It now remains to be seen whether Austria, whose troops from one third of the 1,000-strong force, will withdraw them from the border.
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