GOLAN HEIGHTS (Reuters) - Saddles off, the horses stand quietly on a hill on the Israeli-occupied Golan Heights, the sun gleaming on the blue waters of the Sea of Galilee below.
The trekkers back from riding in the tranquil countryside around Ramot ranch might well forget that this strategic, water-rich plateau was seized in war from Syria in 1967 -- and that its full return is the price Damascus demands for peace.
For Justine Peleg, who runs the ranch with her husband Uri, the chance that Israel might cede the Golan, which it annexed in 1981 to world condemnation, is a small but persistent cloud.
"It's always at the back of your mind, especially as someone who owns a business -- you wonder whether to keep building and reinvesting," the English-born Israeli said. "But it just sits there behind you, it doesn't stop you doing anything."
Israel and Syria, which came close to a peace deal in 2000, have held four rounds of indirect talks in Turkey since May, but neither side seems eager for face-to-face negotiations before a new U.S. president takes over and Israel finds fresh leadership.
Peleg has grown very fond of the 1,200 square km (460 square mile) Golan, a land of brown earth, black rocks and volcanic outcrops, where her husband fought as a paratrooper 41 years ago. She sees no reason why it should change hands again.
"As far as Israeli law is concerned, it is a part of Israel, like Tel Aviv or Haifa, so why are we even talking about considering giving it back?" she asked, sitting in her garden.
Her sentiments are widely shared among the 18,000 Israeli settlers in the Golan, living alongside about 20,000 Syrian Druze villagers, most of whom have refused Israeli citizenship.
"We are living here, and we believe we will continue to live here and make wine here," said Shalom Brayer, chief executive of the 25-year-old Golan Heights Winery, which produces about six million bottles a year in the small town of Katzrin.
Brayer is keen to distinguish Israeli settlers in the Golan from their more militant, religious counterparts in the West Bank, where he recognizes that Palestinians claim the same land.
"It's a tragedy there because there are two nations in one place," he said. "Here it was different. We never did something wrong to the Arabs because when we came here it was empty."
Syria says 153,000 Golan residents fled in the 1967 war, forming a displaced community that has grown to 600,000.
"When we started, we were pioneers. We came here with the government's blessing," said Brayer, who has spent 34 years in the Golan. "We planted orchards, vineyards, modern agriculture."
The "pioneering" days are over in an area where ski resorts, wineries and tourism now supplement fruit and cattle farming, shaping what the settlers hope will be a permanent reality.
Yet successive Israeli prime ministers, from Yitzhak Shamir in 1991 to Ehud Olmert now, have negotiated with Syria.
"Every few years they start talking," said the Polish-born Brayer, 54. "To continue your life here as a normal human being, you must decide it's business as usual. Otherwise you leave."
And if Israel does return the Golan?
"We'll be angry, we'll be against it, but we won't shoot at the Israeli army -- we are not Gaza or Hebron," he said.
"We can live in a smaller Israel. The real problem is that Arabs can't live with Israelis. They don't want to. For them we are always strangers, like the Crusaders."
The Golan settlers are determined to ensure their voice is heard and to organize political resistance to any handover, by canvassing parliament members or demanding that any future peace deal with Syria should be put to Israelis in a referendum.
"Israelis love the Golan," growled Ramona Bar-Lev, 58, the gruff-voiced chairwoman of the Golan Communities Office in Katzrin. "About 70 percent say they are not willing to exchange the Golan for a real peace treaty, so we have good support."
Israel, she argued, should simply hang onto the Golan until Syria is ready to abandon it. "It belongs to Israel, full stop."
An opinion poll by the Maagar Mochot research institute in May showed two-thirds of Israelis oppose withdrawing from the Golan for the peace treaty Syria is offering in return.
Israelis prize the Golan for the streams that run into the Sea of Galilee -- source of a third of Israel's fresh water -- and for natural beauty that lures hikers, skiers and tourists.
Above all, they see its commanding heights, once used by Syrian gunners, as a military asset, putting the Israeli army just 60 km (37 miles) from Damascus -- though many analysts say that in an era of long-range missiles and early-warning systems, a demilitarized Golan would have little strategic value.
For Avi Zeira, an entrepreneur who has built a wind turbine farm on those heights, the nuts and bolts of a deal with Syria mean less than the future of the Golan's Israeli residents.
"Technical arrangements are important, but not the heart of the matter. Water, demilitarization, open access, all these can be fixed in negotiations. I'm speaking about our basic rights here after 40 years. This should be on the table," he said.
Zeira suggested a formula whereby Syria would get formal sovereignty over the Golan, but with arrangements allowing Israelis to pursue their lives alongside returning Syrians.
"Some people say it's ours, it's Biblical, it's annexed. Others say the same holiness exists for peace. I say, find a middle way. If not, it's not a necessity, we're here to stay."
As the sun sank over the Sea of Galilee, Peleg cited the Golan's wide open spaces as ideal for breeding, raising and riding horses. "If there is real peace, we'll welcome Syrian riders to Ramot ranch," said the 38-year-old mother of two, admitting in the same breath that this was "a pipe dream."
Glancing out over the hills and lake, Peleg said her family might even consider moving to Montana if forced from the Golan.
"I'm a Zionist and Israel is my home. But if I have to leave here ... I'll be bitter, I'm sure I'll be bitter."
Editing by Sara Ledwith