'Moment of truth' at hand - Bush

On the brink of war with Iraq, US President George W. Bush said at a crisis summit that todaywould be the last day for diplomatic efforts to peacefully disarm Iraqi President Saddam Hussein.

"We concluded that tomorrow is a moment of truth for the world," Bush told a news conference on Sunday in the Azores joined by the leaders of Britain, Spain and Portugal.

"Tomorrow's the day that we will determine whether or not diplomacy can work," Bush said. He confirmed that today would be the last day a US-backed resolution to authorise war could be voted on at the UN Security Council.

Once diplomacy was exhausted, US officials said, Washington would move to a war footing and Bush would address the United States as early as today, issuing a final ultimatum to Saddam and giving aid workers and others time to leave Iraq.

The US-backed resolution faces a French veto even if the needed nine votes to pass it could be found. A Spanish source briefing reporters on Prime Minister Jose Maria Aznar's plane said Spain was not confident the votes were there.

Aznar and British Prime Minister Tony Blair said one final round of diplomatic contacts would be made in a last-ditch effort to win agreement on an ultimatum for Saddam that would authorise war.

Shortly after the summit, Saddam displayed fresh defiance, saying Iraq would fight "anywhere in the world" if the United States invaded.

"When the enemy opens the war on a large scale it should realise that the battle between us will be waged wherever there is sky, earth and water anywhere in the world," he told a group of military officers at a meeting carried by the state Iraqi News Agency.

The Gulf was already preparing for war. Saddam divided Iraq into four military districts under his command to prepare for any assault by a quarter of a million US and British troops massed in the Gulf region.

He denied having banned weapons and called the United States "the unjust judge of the world".

And in Kuwait, the staging ground for any assault on Iraq, a government official said he believed war would start within 10 days. Information minister Sheikh Ahmad al-Fahd al-Sabah told a news conference: "I think war is quite near... I think that in not more than 10 days we will hear the war will start."

Many of the quarter of a million troops the United States and Britain have massed within range of Iraq are gathered in the Kuwaiti desert, ready to drive north towards Baghdad.

The dispute within the UN Security Council has caused a bitter split, with France, Germany and Russia sharply opposing any automatic authorisation of force and calling for more time to allow international arms inspectors to work.

The allies in Azores showed little interest in French signals it could accept a 30-day or 60-day limit on the inspections. "Without a credible ultimatum authorising force in the event of non-compliance, then more discussion is just more delay," Blair said.

Bush, who has vowed to bypass the United Nations if it fails to disarm Iraq, and called the Security Council debate a test of the body's relevance, said he would go back to the United Nations to seek cooperation on rebuilding Iraq if war is declared.