JERUSALEM (Reuters) -- Keen for a little bit of certainty in a turbulent Arab world, Israeli leaders persuaded themselves last year that Syrian President Bashar Assad -- the devil they knew next door -- was finished, and something possibly better might be on the way.

But it was not to be. With the Syrian uprising now into its 14th month and Assad still firmly in power, Israel has few options other than to sit the crisis out, unable to influence the outcome of an upheaval that is sure to affect it.

Israeli officials and analysts believe Assad will hang on for a while, battling a popular revolt that Israel, Arab and Western powers worry could yet be hijacked by Islamist radicals, after four decades of calm along Israel's border with Syria.

"A nuanced evaluation of the situation in Syria suggests that while Assad has lost his legitimacy amongst the masses, he still maintains the vital support of much of the army," Israeli Defense Minister Ehud Barak said in Jerusalem last week.

"So the tragic massacre of innocents continues while the future of Syria is shrouded in uncertainty," he told foreign correspondents.

"Whatever follows Assad's bloodstained regime will be greeted with Israel's extended hand of peace ... Our other hand will remain firmly grasped to our weapon."

As with the revolt that toppled their longtime Egyptian ally Hosni Mubarak 15 months ago, Israeli leaders had tried to keep their lips buttoned about Syria at first and let the storm unfold, hoping for the best.

Then as the death toll quickly mounted in Assad's ruthless crackdown on the popular challenge to his rule, top officials including Barak and Prime Minister Benjamin Netanyahu said the Assad regime was clearly on its way out.

But that was last year. Assad is still in power.

In the long term, Israel would like nothing better than to see the collapse of the Shiite Muslim-dominated Syria-Iran-Hezbollah axis, a hostile northern arch in which Assad's government headed by his Alawite sect forms the keystone.

Syria's fractious Sunni Muslim-led opposition says it would turn a post-Assad Syria away from Israel's main enemy, Iran, towards moderate Sunni powers in Egypt, Saudi Arabia and the Gulf.

The prospect of peace with Syria is enticing for Israel. But Syria's opposition is deeply divided, and Israel has little if any leverage to promote the emergence of a moderate government next door in Damascus - three hours' drive from Tel Aviv.

"Israel is entirely powerless to affect the outcome in Syria," says Jonathan Spyer, senior fellow at the Global Research in International Affairs center in Herzliya. "Israel's role in the current events in Syria is that of spectator."

"What Israel of course can do and is doing is to strengthen its defensive posture on its northern border in the event of any attempt by elements in Syria to try to re-focus attention on Israel. For my part, I consider this unlikely," Spyer said.

Weak opposition

Israeli and foreign analysts agree that the grand coalition forged by Netanyahu this week could strengthen his hand in dealing with what Western officials suspect are Iran's nuclear arms development plans and in reviving hopes of a Middle East peace with the Palestinians.

But Netanyahu's now unassailable Knesset majority makes no obvious or immediate difference in the case of Syria.

Two car bombers killed nearly 60 people on Thursday in the deadliest strike in Damascus since the uprising began. The attack appeared to drive a stake through the heart of a dying ceasefire declared by international mediator Kofi Annan on April 12, which he acknowledges has failed to halt the bloodshed.

"The hapless attempt to implement the Kofi Annan plan is ending in absurdity and humiliation," said Spyer.

He believed Assad stood a good chance of surviving, "unless an international coalition comes into being which supports the opposition at least as firmly as the international coalition behind Assad supports him".

Active support of the opposition would mean the creation of a buffer zone in the north, and assistance to the armed element in the Syrian uprising, this analyst said.

Technically, Israel remains at war with Syria and its involvement in such a risky gamble seems highly improbable.

Despite Israel's annexation of the Golan Heights after the 1973 Middle East conflict, the United Nations-patrolled disengagement line with Syria has been Israel's quietest border for 40 years - under the late Hafez al-Assad and now his son.

Barak predicted one year ago that Assad would soon be toppled, saying Israel should not be alarmed. The process taking place in the Middle East holds great promise, he said last May.

Today Barak says Israel must be ready in case "as Syria descends into chaos, advanced weapons, or part of their stock of chemical and biological weapons could spill over into both terrorist and criminal hands".

Syria is widely believed to possess chemical warheads which can be fired with Soviet-era Scud missiles. Israel fears that Hezbollah, or radical Islamists, or al Qaida fighters, could grab some of them in an uncontrolled meltdown of the regime.

Yemeni style solution?

"Assad is going to last," said Syria analyst Moshe Maoz of Hebrew University. "The balance of power is in his favor. There have been no mass defections."

The officer corps of the army are members of Assad's minority Alawite sect, who know they would be slaughtered if Sunni-led rebels took control of Syria, and so will fight on for their lives, Maoz said.

Punitive embargoes could take years to bring down Assad, he said. Sympathetic neighbors Iraq and Lebanon would ensure that Damascus never faces "a fully-fledged siege" of sanctions.

In the meantime, Maoz said, Israel's best long-term strategy would be to close ranks with Sunni Arab leaders in the region, by moving finally and decisively to settle the Middle East conflict, with a peace treaty and a Palestinian state.

"This is the crux issue for everybody," the analyst said. Not all Israelis agree there is real linkage between the occupation of the West Bank and Arab or Iranian hostility.

But Israel is in "a stormy sea in which the waves of radicalism are growing in strength", said Barak, and "any intimation of democracy, any hint of peace should be grabbed with both hands."

A senior official said Israel had no solution for Syria up its sleeve. It is anxious to see more assertive policies by Western and Arab capitals, including imposition of humanitarian corridors to areas of conflict from which the United Nations estimates one million Syrians have been displaced.

Such corridors would need military protection, which Western powers so far firmly rule out. Syria's northern neighbor Turkey could force a rethink, however, if it were to declare to its NATO allies that its own security was threatened.

Still, it would be mistaken to corner Assad, the Israeli official said. It would be wiser to seek a way to convince his ally Russia that its investment in Syria would not be lost if Assad could be convinced to step aside, as Yemen's Ali Abdullah Saleh did late last year under Saudi and American pressure.

Russian cooperation, said Spyer, is crucial if the Western-Arab coalition backing Annan's plan decides Assad is not complying and goes back to the Security Council seeking "further measures" to enforce a ceasefire and political settlement.

"It is Russian weaponry which is keeping Assad in place. Russia has invested deeply in Syria, both in terms of arms exports and broader infrastructural projects and the search for oil and gas. Of course, the importance of the naval base at Tartous should also not be underestimated," he said.

But Spyer thinks Moscow and other allies of Assad "apparently believe that the regime stands a good chance of coming through this and now has the upper hand. So why should they do their US regional rivals a favor and make themselves look weak by abandoning a client?"