HIGHLIGHTS|| Bush Describes Saddam's First Public Criticism of UN Weapons Inspectors as Discouraging|| However, UN Inspectors Gave Bush No Ammunition to Justify War With IAEA Chief Stressing That Nothing Suspicious Was Found in Iraq as of Yet|| There Are Signs That Washington is Viewing a UN Security Council Session on Iraq on Jan 27, 2003, as Trigger for War|| UN Inspectors to Report to UN Security Council Thursday But No Final Assessment is Expected Before Jan 27, 2003|| However, London Says War with Baghdad Was Far From Being a Foregone Conclusion|| STORY The United States deployed more troops, warships and planes to the Gulf region and drew up plans for a post-war Iraq involving an extended military presence, but Iraqi President Saddam Hussein voiced defiance.

President Bush delivered a fresh demand on Monday for Saddam to come clean over any weapons of mass destruction and said accusations by the Iraqi leader that U.N. inspectors were spies was "discouraging news for those of us who want to resolve this peacefully."

Bush, who has made no secret of wanting to see Saddam toppled, was given no ammunition by a senior U.N. inspector to justify a war against Baghdad, however.

"We haven't yet seen any smoking gun," International Atomic Energy Agency chief Mohamed ElBaradei told Reuters after several weeks of searches in Iraq by his nuclear experts.

Washington's plans for a post-war Iraq envisaged security, food, economic, humanitarian and reconstruction assistance, in probably the most ambitious scheme to administer a country since the Allied occupations of Japan and Germany after World War II.

U.S. officials said troops would stay until there was stability in Iraq, an oil-rich country of 24 million where ethnic and religious divides have long posed problems for rulers.

They declined to be drawn on a timetable. "We are determined to provide for security and expect if the conflict happens, Saddam is deposed and a new regime is put into place, that security will be an issue for some time," said one.

Plans for Post-War Iraq

A civilian administrator, possibly picked by the United Nations, would run the country's economy, rebuild political institutions and administer aid programs under the U.S. plan.

In a sign Washington views a January 27 meeting of the United Nations Security Council on Iraq as a possible trigger for war, U.S. officials disclosed that the U.S. Navy's 1,000-bed hospital ship Comfort set sail on Monday on an expected journey of about three weeks to an undisclosed destination.

U.N. arms inspectors are due to report to the Security Council on Thursday but have to deliver a key assessment on Iraqi compliance with council resolutions on January 27.

Saddam Defiant

Saddam used Iraq's Army Day to go on television to brush aside Washington's threats, calling them the "hiss of snakes and bark of dogs" and said Baghdad was ready for any attack.

The television showed footage of Saddam meeting top government and military officials, including commanders of his elite Republican Guards.

As U.N. arms inspectors once again headed out on Monday to verify Iraq's official stance that it has no nuclear, biological or chemical weapons, Saddam issued his first public criticism of the U.N. teams when he accused them of spying.

U.S. Military Build up Continues

The United States pressed on with a major military build-up in the Gulf region, pouring in planes and ships and stepping up troop deployments to at least double the 60,000 already there. The prospect of war 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.

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

"What is important for people to understand is that war is not inevitable," Foreign Secretary Jack Straw told the BBC.

PHOTO CAPTIONIraqi soldiers march in front the tomb of the unknown soldier during a military ceremony on Army day in Baghdad, January 6, 2003. (Suhaib Sale