BEIRUT- U.N. envoy Terje Roed-Larsen urged the Lebanese government on Friday to sit down with Syrian officials and demarcate their common border to clear up a dispute over a volatile frontier strip occupied by Israel.

"It is now urgently necessary for the two parties to sit down together in order to resolve all the border issues," Roed-Larsen said after meeting Foreign Minister Fawzi Salloukh.

"An agreement cannot be done by the U.N.. It can only be done by two sovereign states."

Lebanese leaders agreed at national talks last week that the Israeli-occupied Shebaa Farms -- on the border between Lebanon, Israel and Syria's Israeli-occupied Golan Heights -- is Lebanese and want the Jewish state to withdraw its troops from there.

Syria also says the area is Lebanese, but six years after Israel withdrew from the rest of southern Lebanon under pressure from attacks by Lebanese Hezbollah guerrillas, Damascus has yet to sign official documents to that effect.

For its part, the United Nations considers the Shebaa Farms Syrian land occupied by Israel in the 1967 Middle East war and has certified Israel's withdrawal from Lebanon as complete.

But Roed-Larsen said the Blue Line, drawn by the U.N. to mark the extent of Israel's withdrawal, was not final and could change if Syria and Lebanon drew their border.

His comments imply such an agreement would allow the U.N. to ask Israel to complete its withdrawal from Lebanon and thereby end regular Hezbollah attacks in the area.

Hezbollah, which is backed by Syria and Iran, is under international pressure to disarm but has vowed to keep its arms to liberate the Shebaa Farms and as a deterrent against Israel.

The Norwegian diplomat is due to present a report next month on progress in the implementation of Security Council resolution 1559, which demands that foreign troops leave Lebanon and that militias in the country disarm.

He praised the Lebanese national talks, aimed at ending a political crisis that has paralyzed the country by thrashing out divisive issues such as the fate of Hezbollah guerrillas.

Roed-Larsen arrived from Jordan where he discussed with Palestinian President Mahmoud Abbas the fate of Palestinian militias based in Lebanon.

"I am much encouraged by my talks with the Palestinian president, which focused on the Palestinian militias in Lebanon," Roed-Larsen said in a statement. "President Abbas's strong support for resolution 1559 is much appreciated."

Lebanon's top leaders agreed last week to disarm Palestinian groups outside the country's 12 camps in six months and to reorganize weapons inside the camps, mainly run by Palestinian factions loyal to Abbas' Palestine Liberation Organization.

They also agreed to pursue normal diplomatic relations with Syria. Ties have been strained since last year's murder of Lebanese ex-Prime Minister Rafik al-Hariri sparked local and world pressure on Syria to withdraw its forces from Lebanon.

Many Lebanese blame Syria for the killing. Damascus has strongly denied any role, (Reuters)