The Iraqi leadership has rejected a United States ultimatum that President Saddam Hussein should go into exile and says the country is ready to repel any invaders, Iraqi state television said early today.
The television showed Saddam, making a rare appearance in a military uniform, chairing a meeting of his cabinet.
"The meeting stressed that Iraq and all its sons were fully ready to confront the invading aggressors and repel them," the television said, reading a statement released after the cabinet.
"Iraq does not choose its path on the orders of a foreigner and does not choose its leaders according to decrees from Washington, London or Tel Aviv, but through the will of the great Iraqi people," the statement added.
Earlier, Saddam Hussein's eldest son Uday issued remarks saying any US forces that invaded Iraq would be engulfed in a bloody battle.
"The wives and mothers of those Americans who will fight us will weep blood, not tears," elder son Uday said in a statement that appeared to kill off all hope that war might be averted.
Though Uday did not specifically say he spoke for his father, Saddam has frequently dismissed talk of exile in the past.
US and British soldiers made final preparations for an invasion from the Kuwaiti desert as UN weapons inspectors flew out of Baghdad, effectively ending a period of failed diplomacy.
Defying United Nations allies and dividing world opinion, Bush yesterday defended Washington's right to wage what he portrayed as a pre-emptive war against September 11-style terrorism and promised to bring prosperity and democracy to the Iraqi people.
"The United Nations Security Council has not lived up to its responsibilities, so we will rise to ours," Bush said in a brisk, televised address from the White House.
"The tyrant will soon be gone," he added, urging Iraq's forces to surrender rather than be destroyed by the high-tech firepower of 280,000 US and British troops massed in the Gulf.
"Saddam Hussein and his sons must leave Iraq within 48 hours. Their failure to do so will result in military conflict, commenced at a time of our choosing," Bush said, warning Americans of the threat of terrorist reprisals and putting the nation on its second-highest level of alert.
The deadline is 4.15am Iraqi time (1.15pm NZT) on Thursday.
Uday said it was Bush and his family who should go. "The proposal should be that Bush leaves office in America, he and his family," Uday said.
French President Jacques Chirac led those world leaders who accused the United States of being reckless with the unrivalled power it has enjoyed since the Cold War and of flouting the will of the United Nations in a way that may fuel global instability.
Washington was putting "force before justice", Chirac said.
"There is no justification for a unilateral decision to resort to force," he insisted, saying Iraq did not represent an immediate threat and that UN disarmament had been working.
But with war looking all but inevitable, the United Nations drew down the curtain on 12 years of frustrated efforts since the 1991 Gulf War to ensure Iraq has no chemical, biological or nuclear arms. UN inspectors flew to Cyprus from Baghdad.
"We're sad that we're leaving. We know that we could have stayed longer to finish our job," one of them said, reflecting the views of other powers like Russia, China and Germany.
In Baghdad, Iraqis were fearful but resigned to their third war in just over two decades. Impoverished by UN sanctions since 1990, people stocked up on food and other essentials.
Women crowded maternity wards asking for Caesarean surgery rather than face giving birth in crowded bomb shelters.
To the south, in the Kuwaiti desert, US and British troops were packing up tents and preparing kit for an invasion they expect within days, probably preceded by a massive bombardment.
"Finally we're going somewhere. We're going to war," said Sergeant Robert Vennebush, 25, with an army engineering unit.
Global financial markets took heart from the view that a quick US victory would end months of uncertainty hanging over the world's biggest oil-producing region. Brent oil prices dropped 10 per cent and stock markets jumped after Bush's speech.
"Markets are truly backing the view that it's going to be a short, sharp, successful affair," said Michael Wilson of fund manager Ausbil Dexia in Sydney.
Bush said Iraq might provide weapons of mass destruction to groups like Osama bin Laden's al Qaeda Islamist radicals, whom he blames for the September 11 attacks and who were the object of the US campaign against the Afghan Taleban 18 months ago.
Not to pre-empt that would be "suicide", Bush said, scolding France - though not by name - for lacking America's "resolve".
Many Western leaders share Bush's scepticism of Saddam's denials of having banned weapons and his distaste for the Iraqi leader's record over three decades. But some disagree about the extent of his possible sponsorship of terrorists and argue that war may simply fuel more violence in the Middle East and beyond.
German Chancellor Gerhard Schroeder said war meant "certain death to thousands of innocent men, women and children".
Chinese Premier Wen Jiabao called for peace and in Moscow parliament delayed a vote on a US-Russian arms control treaty in irritation at Washington ignoring Russia's views on Iraq.
The Iraq issue has rammed a wedge between nations otherwise friendly to Washington. Britain, Spain, Italy and others accuse the doubters like France, Germany and Canada of repeating the mistakes of those who appeased Adolf Hitler in the 1930s.
Some Muslim states said war would inflame just the sort of violence that Bush said he was seeking to prevent.
In Indonesia, the world's most populous Muslim nation, a moderate Islamic leader called Bush and his closest ally, British Prime Minister Tony Blair, "war criminals".
But Japan expressed support. And Australia offered troops, in spite of popular opposition that saw "No War" daubed in blood red letters on the landmark roof of the Sydney Opera House.
Blair prepared to face down a major parliamentary rebellion in his Labour Party in order to keep his troops in the Gulf despite failing to secure a clear UN mandate. As a third minister resigned from his government, his political future may now depend on a war being brief and fairly bloodless.
Turkey, a Nato ally, also appeared to be softening its resistance to helping US forces, though possibly only by offering airspace to planes missiles rather than grant requests for US troops to invade northern Iraq from Turkish bases.
Few soldiers expect the Iraqis to put up much of a fight. But they are ready for bitter guerrilla warfare from Saddam loyalists with little to lose - and for chemical attacks.
Israelis, targeted by Iraqi Scud missiles in the Gulf War, began sealing rooms against chemical or biological warfare.
Terrified of reprisals, thousands of Iraqi Kurds fled the city of Arbil in their northern region beyond Saddam's control.
Members of the US Congress reflected a divided American public as they voiced support and concerns about a war. They rallied around US forces even as some of them expressed sharp differences over how Bush has handled the diplomatic crisis.
- REUTERS
Herald Feature: Iraq
Iraq links and resources
Iraqi heads spurn US demand, Saddam's son vows bloody battle
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