"We are not yet there," he said. The official, who is in contact with Turkish mediators, spoke on condition of anonymity because the talks are private.
Turkish officials - including an aide to Prime Minister Recep Tayyip Erdogan - shuttle between the sides who stay in separate hotels in Istanbul. The indirect Israeli-Syrian talks in Turkey began in May.
Previous negotiations between the two countries broke down in 2000.
Israel captured the strategic Golan Heights from Syria in 1967, and Syria demands the return of the territory as a condition for peace.
The fact that Syria has agreed to the indirect talks is seen as a signal that Damascus is more open to peace with Israel lately.
However, Israeli skeptics contend that Syria is interested more in the appearance of peace talks to break its isolation than in actually making peace.
Israeli officials have been pressing for direct talks from the start of the negotiations in Turkey. On Tuesday, Israeli Prime Minister Ehud Olmert urged Syria to make a strategic choice between peace and isolation.
Olmert said the process in Turkey would eventually reach a point where Syria has to choose "between the Iranian grip, partnership in the axis of evil and international isolation, or peace, economic prosperity and a place among the family of nations."
Last year Israel bombed a site in Syria it believes was a nascent nuclear reactor. Syria denies it has such a program.
