David Miliband arrived in Syria last night for the highest-level British visit in seven years, testing the waters to see if the regime is ready to loosen its ties with Iran and move out of the international doghouse.

The Foreign Secretary flew to Damascus after a two-day visit to Israel and the Palestinian territories, where he urged both sides to push ahead with peace efforts, which officials believe could start to bear fruit in the coming year.

The last such visit to Syria was in 2001, when Tony Blair met President Assad, the London-trained ophthal mologist who had recently taken power after the death of his father. But Mr Blair’s mission to draw the young leader out of isolation failed miserably when Mr Assad praised Palestinian militants during a joint press conference.

While Syria maintains close ties with Tehran and harbours leaders of groups such as Hamas, the Foreign and Commonwealth Office believes that the situation has changed significantly since that disastrous trip.

Syria and Israel have admitted in recent months holding secret indirect talks, mediated by Turkey, to try to reach a peace deal, with observers saying that some progress has been made. With the Sunni insurgency waning in neighbouring Iraq – which Syria was accused of fuelling by allowing fighters to move freely across its borders – Britain feels that the time is ripe for renewed contacts.

Syria has also suffered a spate of security breaches unimaginable in recent decades, with the head of Hezbollah’s military command blown up, a senior general assassinated and a deadly car bombing in the capital blamed on a Sunni group that many had accused the regime of supporting in Lebanon.

In addition, it has suffered some humiliating attacks. Last year Israel bombed with impunity a site that some American observers claimed was a fledgeling nuclear facility. Last month the US military conducted a deadly raid, said to have been launched from Iraq, to hunt down what they called al-Qaeda militants sheltering across the frontier.

Years of sanctions have exhausted the Syrian economy, and the promise of renewed trading links with the West may boost hopes further of turning Damascus into an ally.

Another sign giving diplomats cause for guarded optimism is a sudden Israeli interest in an Arab League peace plan first aired six years ago, in which Israel was offered normalised ties with the Arab world in return for a peace deal with the Palestinians based on the 1967 boundaries before the Six Day War. Officials also sense a renewed interest in the plan by the Arab world, now more concerned about the rise of Iranian hegemony than their dispute with Israel.

“There’s quite a lot to play for in Syria,” a British source said, adding that a new administration in the United States, more interested in dialogue than force, could help to ease the way.

There are still many obstacles in the way of such grandiose dreams. The Syrian President has proven as adept as his father at playing different sides off against each other, and there is much speculation about what his real intentions are. Syria is also demanding a return of the Golan Heights, captured by Israel after the Six-Day War, as the price for a peace deal.

Officials insist that Mr Miliband will not be conveying any private messages from Israel when he meets Mr Assad and Walid al-Muallem, his Foreign Minister. But they do see the trip as a timely mission to explore whether Syria may be ready to break with the past.

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