Iraq accused U.N. arms inspectors of being U.S. and Israeli spies and helping Washington prepare for possible war on Baghdad, but the United States cooled any talk of imminent military action. It was not immediately clear on Thursday whether Iraq planned to take any action against the inspectors or whether it was simply an escalation in a war of words with Washington over U.S. accusations that Baghdad has weapons of mass destruction.

"The inspectors have come to provide better circumstances and more precise information for a coming aggression," Iraqi Vice-President Taha Yassin Ramadan said on Wednesday, speaking just after Baghdad promised to carry on cooperating with the United Nations.

"This is not an accusation, because the inspectors, from day one, their foremost work was spying. Their work was spying for the CIA and Mossad together," he said, referring to the U.S. Central Intelligence Agency and Israel's secret service.

Addressing an Egyptian delegation in a Baghdad hotel, Ramadan accused the inspectors of looking for any pretext for war and said a search of one of Iraqi President Saddam Hussein's lavish palaces on Tuesday amounted to provocation.

The inspectors, who trudged past camels and through a foul-smelling desert site on Wednesday, suspended searches for Thursday and Friday because of a Muslim holy period. So far they have found nothing untoward, apart from some old artillery shells containing mustard gas that the U.N. already knew about.

Iraq said on Wednesday it would go ahead with a planned declaration to the U.N. on Saturday that would cover its biological, chemical, missile and nuclear technologies, but stressed again it had no weapons of mass destruction. The U.N. had set a Sunday deadline for the declaration.

Baghdad's statement was another message of defiance to President Bush, who insists Iraq does possess weapons of mass destruction and has threatened war if necessary to disarm it.

US HAWK COOLS WAR TALK

U.S. Deputy Defense Secretary Paul Wolfowitz, a leading Bush administration hawk on Iraq, dismissed any suggestion that Iraq's declaration to the U.N. would in itself trigger a U.S. decision on military action. World oil prices fell two percent on his words.

"I'm quite sure (Bush) is not going to make it simply on the basis of one single piece of information," Wolfowitz said in Brussels. "He's going to make it...also (in) close consultation, particularly with our allies but indeed with the international community."

Hussam Mohammed Amin, head of the Iraqi National Monitoring Directorate, said Baghdad's arms dossier for the U.N. would be huge but he added: "The declaration will repeat that in Iraq there are no weapons of mass destruction.

Amin said it would cover "biological, chemical and missile and nuclear activities" as well as "dual-use activities," a reference to technology with both civilian and military uses.

Washington dismissed Baghdad's statement and demanded more aggressive U.N. searches in Iraq. White House spokesman Ari Fleischer said previous Iraqi denials that it had arms of mass destruction had been proved false by earlier U.N. inspections.

U.N. arms inspectors resumed inspections in Iraq last week under a new U.N. Security Council resolution after leaving in 1998 complaining Iraqi authorities were obstructing them.

They searched Iraq's main nuclear research plant and a former chemical arms production center on Wednesday, once again reporting cooperation from the Iraqis as they have done all through their week-long mission so far.

Analysts said Baghdad's statement that it would hand over a huge dossier meant it was likely to be days before the U.N., Washington and others could make any assessment. There will be copies in both Arabic and English.

SADDAM REAPPEARS IN PUBLIC LOOKING RELAXED

Iraqi President Saddam Hussein, looking relaxed and chatting to former Zambian President Kenneth Kaunda, was seen on Iraqi TV on Wednesday for the first time for nearly three weeks. Usually hardly a day goes by without him appearing.

U.N. inspectors swooped on Iraq's main nuclear plant al-Tuweitha, some 12 miles south of Baghdad.

A team from the International Atomic Energy Agency (IAEA) spent five hours examining buildings. Several tons of uranium have been under seal by the IAEA at Tuweitha since 1998.

Inspectors from the U.N. Monitoring, Verification and Inspection Commission searched the sprawling Muthanna military site, some 45 miles north of Baghdad.

They said they found artillery shells at the desert complex containing mustard gas that previous inspectors could not destroy before they left in 1998.

"Of course we are interested because it is a good quantity of mustard," said chief inspector Dimitri Perricos.

Reporters saw warehouses full of destroyed weapons such as bombs that could be filled with chemicals, as well as rusting equipment ranging from tanks to metal pipes.

A foul smell wafted round the site, and Iraqi officials said it came from remaining chemicals. Near the entrance stood a picture of Saddam. A herd of camels made their way through a hole in the complex's fence.

It was a chemical arms research, development and production facility from 1983 to 1991, producing thousands of tons of precursors, nerve agents and mustard gas. The site was bombed heavily during the 1991 Gulf Wa.
Inspections would resume on Saturday, an Iraqi official said.

The U.N. Security Council extended on Wednesday the U.N. oil-for-food humanitarian program in Iraq for six months and agreed to review within 30 days a list of goods that Baghdad needs approval to import.

The United States dropped its demand for only a two-week extension at the insistence of the other 14 council members.

Despite Wolfowitz's comments, U.S. preparations for possible war were still in evidence. U.S. Navy officials said the aircraft carrier Harry S. Truman and its battle group were set to depart on Thursday with warplanes and missiles that could be part of an opening salvo in any U.S.-led attack on Iraq.

Iraqi Deputy Prime Minister Tareq Aziz told Swedish TV: "Nobody thinks that anybody in a military conflict with the United States is going to win the military conflict. But we can win the political conflict.

"They can kill, they can destroy... But they cannot change the will of the Iraqi people. They cannot change the Iraqi government because the Iraqi government is not their own pawn."

PHOTO CAPTION

U.N. Arms inspectors arrive to search the al-Tuweitha plant run by Iraq's nuclear power authority in Salman Bak, 12 miles south of the capital December 4, 2002. Iraq said its planned declaration to the United Nations (news - web sites) would cover biological, chemical, missile and nuclear technologies, but stressed again it had no weapons of mass destruction. (Suhaib Salem/Reuters)