According to Yadlin, the organization ordered its militants to disperse in Syria, Lebanon and Egypt in order to carry out attacks there.
He said that while Al-Qaida militants have appeared in the Palestinian territories, the number in the Gaza Strip "could be counted on two hands." A few other militants have also been located in the West Bank city of Nablus.
Yadlin said Iran was continuing to smuggle weapons to Hezbollah forces through Syria. He added that Hezbollah was focusing its efforts on rehabilitating its forces following the war with Israel, not on planning attacks.
The Military Intelligence chief also told the Knesset Foreign Affairs and Defense Committee on Tuesday that the alert level within the Syrian army has been lowered.
Yadlin added that Israel cannot be sure whether Syria's peace overtures are genuine, but Israel can be certain that Syrian President Bashar Assad is intereseted in entering peace talks with Israel in order to gain legitimacy within the global community.
Yadlin also said that the Hezbollah is continuing to rehabilitate its Katyusha rocket launching capabilities, after depleting much of its rocket supply during the war.
He added that Hamas would likely enjoy improved economic standing in the near future as a result of the recent smuggling of large sums of money into the Gaza Strip by the Hamas.
Brigadier General Yossi Baidatz, head of the Military Intelligence research division, said two weeks ago that "Syria is genuinely interested in negotiations. The Syrian regime believes that dialog with Israel will only better its position and improve its standing."
However, Mossad director Meir Dagan said "I don't truly see Syria offering to renew negotiations with Israel."