Turkey has already been working behind the scenes to try and bring the two bitterly opposed neighbours to the negotiation table, with high ranking Turkish officials having recently visited both Damascus and Tel Aviv.
According to the statement issued by Olmerts office, Syria and Israel have decided to hold a serious and continuous dialogue seriously and continuously, with the intention of arriving at an embracing peace treaty, in accordance with the framework laid down by the 1991 Madrid Peace conference.
Both sides have declared their intention to hold these talks openly and in good faith, the statement said.
The Turkish Foreign Ministry issued a statement after Olmerts announcement saying that, Syria and Israel have started peace talks mediated by Turkey.
Both parties announced they would pursue the talks with goodwill and in an open-minded manner.
The Reuters news agency quoted an unnamed Israeli official as saying efforts to put in place the mechanisms for negotiations had been taking place for some time.
This started already last year, during a visit by the Prime Minister to Turkey, and its coming to fruition now, the official said.