Vice Prime Minister Silvan Shalom confirmed to Israel's Army Radio that top security officials held a special meeting last week to discuss Syria's chemical weapons arsenal.
"It would be crossing a line that would demand a different approach, including even action," he said. Asked whether this might mean a pre-emptive attack, he said: "We will have to make the decisions."
Also on Sunday, Syria announced that it would drop legal proceedings against opposition figures who returned to the country to participate in a "national dialogue" called for by Assad during a recent speech.
Syria's Higher Judicial Council announced the decision in a statement carried by the state news agency. The report gave no further details.
Assad proposed the national dialogue as part of his plan to end the country's crisis as laid out in a high-profile speech this month at the Damascus Opera House.
In the same speech, however, he vowed to keep fighting and referred the opposition as criminals and terrorists — making it unlikely anyone will take their chances on the amnesty offer.
Tens of thousands of activists, their family members and opposition supporters remain jailed by the regime, according to international rights groups.
Opposition leaders have repeatedly rejected any talks that include Assad, insisting he must step down.
Violence continued around Syria on Sunday. The Britain-based Syrian Observatory for Human Rights reported clashes and government airstrikes in neighborhoods east and south of Damascus as well as elsewhere. At least seven people died in attacks in the suburbs, and three others died after a shell landed in the city's southern Yarmouk district.
The group, which relies on contacts throughout Syria, also reported clashes near a train station in southwestern Qadam neighborhood where four rebel fighters and one woman were killed.
Hubbard reported from Beirut. AP writer Ian Deitch in Jerusalem contributed.