Publicly criticises inspectors

A defiant Iraqi President Saddam Hussein yesterday declared his country ready for war and issued his first public criticism of UN weapons inspectors, accusing them of spying.

The head of the UN nuclear watchdog agency said yesterday its inspectors had found nothing suspicious in Iraq so far, but added that it was too early to draw conclusions.

"We haven't yet seen any smoking gun yet, if you like, that Iraq has lied in its declaration on the nuclear issue," International Atomic Energy Agency (IAEA) chief Mohamed ElBaradei told Reuters in an exclusive interview.

"But we're still very much in the process of an inspection and it's too early for us to come to any conclusion," he said. "So far the results (of laboratory tests of samples taken in Iraq) have not raised any eyebrows."

In a 25-minute televised Army Day message, Saddam dismissed US threats to disarm Iraq as "clamour, commotion and hysteria" to divert attention from US domestic and foreign policy failures, and the Israeli occupation of Palestinian territories.

"As we monitor the hiss of snakes and bark of dogs accompanied by continued aggression in the north and south of the country, we act with the confidence of the assured whose actions are not hurried or confused," he said.

"Here, we have prepared for everything." Shortly after the Iraqi leader spoke, US Army officials told Reuters the military had alerted more than 10,000 part-time troops to prepare for active duty and possible movement overseas as early as this week to support the US build-up near Iraq.

The alert came as a US Navy hospital ship headed to the region to handle casualties in the event of a war.

The Bush administration is putting together a plan for a post-Saddam Hussein Iraq that would involve an extended American military presence and use of oil revenues to feed the Iraqi people, US officials said.

But Britain, Washington's staunchest ally on Iraq, said war with Baghdad was far from a foregone conclusion and less likely than many commentators implied.

"There has been so much talk in the newspapers about war, suggestions that the chance of war are 100 percent, that it's important to try and correct that impression," British Foreign Secretary Jack Straw told BBC Radio.

"What is important for people to understand is that war is not inevitable."

The prospect of conflict in the Gulf kept world markets on edge. Safe haven gold hit its highest level in almost six years, oil hovered near a two-year peak and the dollar dipped.

It has also unnerved US allies in the region. Turkish Prime Minister Abdullah Gul wrapped up a three-country tour of the Middle East in Amman to discuss with Jordanian Prime Minister Ali Abu al-Ragheb the potential economic and political impact of a war.