JERUSALEM, Jan 10 (Reuters) - Israel is making preparations for the fall of Syrian President Bashar al-Assad and a flood of refugees from his minority Alawite sect into the Golan Heights, Israel's military chief told a parliamentary committee on Tuesday.

"Assad cannot continue to hold onto power," a committee spokesman quoted Lieutenant-General Benny Gantz as saying.

"On the day that the regime falls, it is expected to result in a blow to the Alawite sect. We are preparing to take in Alawite refugees on the Golan Heights."

Israel should also prepare for the possibility that cornered authorities in Damascus could "as a lifesaver ... act against us", the general said.

Assad has faced 10 months of popular revolt in which more than 5,000 people have been killed, according to U.N. figures.

Israeli officials have said they do not expect his government to last more than a few months but Gantz's remarks were the first indication that Israel is already making contingency plans for the end of the rule.

In a speech on Tuesday, Assad again blamed the unrest on a foreign conspiracy against Syria. His opponents fear Syria could slip into a sectarian civil war between the majority Sunni Muslims and the Alawites and other minorities which support Assad.

Syria's neighbours Turkey and Jordan have called on Assad to step down.

Israeli Defence Minister Ehud Barak said last week that Assad "is weakening" and predicted he would fall this year.

"In my opinion ... he won't see the end of the year. I don't think he will even see the middle of this year. It doesn't matter if it will take six weeks or 12 weeks, he will be toppled and disappear," Barak said.

Gantz told the parliamentary committee that "in the short term it is true that the current events will make it difficult for Assad and the Syrian leadership to act against us".

But Israel must be concerned about its heavily armed neighbour lashing out against it, he said.

"You must take into account that their firing systems remain intact and maintained. Among other things this includes the Russian arming of the advanced Yakhont (cruise) missile and the SA17 (anti-aircraft system)," he told the committee.

"I am not sure that as the events continue the Golan Heights will remain quiet. It could be, under certain circumstances, as a lifesaver, he could act against us."

SYRIAN ARSENAL

Israel captured the Golan Heights from Syria in the 1967 Middle East war. Despite the fact that the two countries have never made peace, the Golan frontier largely been quiet.

Israel rarely censured the Assad government for its domestic crackdowns and has said little about the crisis that erupted last March. Successive Israeli governments have sought peace with Assad, seeing his government as a possible anchor for wider Israeli-Arab accommodation.

But in May last year, Israel accused Syria of orchestrating deadly confrontations on the ceasefire line between the two countries as a distraction from Assad's bloody crackdown.

At least 23 people were killed and scores were wounded when Israeli troops fired on Palestinian protesters who surged against the fortified boundary fence.

The United States, Russia and the United Nations voiced deep concern about the flareup, but it proved to be brief and was not repeated. Israeli sources note that Assad has not tried since then to turn the Golan into a "second front" to try to externalise his crisis.

Although Israel and Syria are technically at war, and Syria is home to hundreds of thousands of Palestinian refugees from the 1948 war of Israel's foundation and their descendants, the Golan Heights had long been quiet.

A U.N. force patrols the demarcation line between the Golan Heights and Syria.

Barak said Israel was also concerned that Syrian weapons could be transferred to the militant Hezbollah movement in Lebanon, "something we view with great gravity".

Syria is widely believed to possess chemical weapons, which Damascus denies, and has long-range Scud missiles capable of striking Israeli territory.

The defence minister said that "when central authority weakens (in Damascus) all kinds of factors can create friction to try and act in the Golan Heights, and there are enough bad people in the region".