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RIYADH, Wednesday (Reuters) Gulf Arab states, key regional U.S. allies, rejected U.S. accusations that Syria was developing chemical weapons and sheltering Iraqi leaders, and said the U.S.-led occupation of Iraq should end quickly.

"We think the threat to Syria should stop. We don't think Syria wants a war or to escalate any situation... We reject any infringement of Syria's security," Qatari Foreign Minister Sheikh Hamad bin Jassim al-Thani told reporters.

"We are watching this with great care and if there is any problem to be solved it is to be solved by direct negotiations by both sides," he said after an emergency meeting of foreign ministers of six Gulf states in the Saudi capital.

Top U.S. officials have accused Syria of giving sanctuary to fleeing Iraqi officials and of assisting Saddam Hussein in his failed efforts to defend Iraq against the U.S.-led invasion.

U.S. Secretary of State Colin Powell toned down the rhetoric on Tuesday, saying Washington had no "war plan" to attack Syria or Iran, which it also accuses of developing weapons of mass destruction. Syria has called the U.S. accusations falsifications designed to further Israeli interests.

Sheikh Hamad also said the six-nation Gulf Cooperation Council (GCC) wanted U.S.-led forces to leave Iraq as soon as possible and hand over control of the country to its people.

"Iraq is now considered occupied and we hope there will be a civil administration of the Iraqi people as soon as possible. We hope this will happen in the coming weeks," Sheikh Hamad said.

"The creation of an Iraqi transitional government is very important because Iraqi people won't accept a government from outside for very long," he added.

Earlier Arab diplomats accused the United States of fronting for Israel in accusing Syria of making chemical weapons and warned the charges could weaken a region already set back by war in Iraq.

Following a closed meeting at U.N. headquarters, the diplomats said they would ask the U.N. Security Council on Wednesday to adopt a resolution declaring the Middle East a "zone free of weapons of mass destruction."

"The only party in the region with weapons of mass destruction is Israel," said Syrian envoy Fayssal Mekdad after the meeting. "If Israel is the only country, then why are the accusations against Syria?"

"These allegations unfortunately have been formulated in Israel," Syrian Ambassador Mikhail Wehbe told reporters.

"We hope they will realize that Syria is an important country in the Middle East and these allegations would not serve peace and security in the Middle East," he said.

Yahya Mahmassani, the Arab League's ambassador to the United Nations, dismissed the U.S. allegations as "unacceptable and unfounded."

"Syria has done nothing," Mahmassani said. "We hope that prudence and wisdom will prevail. We have had enough war in the Middle East."

Meanwhile Israeli Prime Minister Ariel Sharon called Syrian President Bashar al-Assad dangerous and urged the United States to turn up the heat on Damascus.

Sharon made his comments in a newspaper interview as three Palestinian gunmen, two Israeli civilians and an Israeli army officer were killed in a surge of violence in the West Bank and Gaza Strip.

"Bashar Assad is dangerous. His judgment is impaired," Sharon told the Yedioth Ahronoth daily, adding his voice to a chorus of U.S. allegations that Syria is habouring Iraqi leaders, developing chemical weapons and supporting terrorism.

"Anyone with eyes in his head would have known that Iraq was going to be on the losing side. But Assad thought the United States was going to fail," Sharon said.

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