HIGHLIGHTS|| Germany Won't Support or Participate in War, Says Schroeder|| European Mini-crisis over, Says Chirac|| However, Analysts Believe Transatlantic Rift Could Reopen Over How Much Time Iraq Should be Given to Disarm|| France & Britain Bicker over Second UN Resolution on Iraq|| A Shy EU Appeal to Reinvigorate the Mideast Peace Process|| Iraq Reports First Flight by an American U-2 Plane over its Territory||STORYEuropean Union leaders united on Monday to warn Iraq that U.N. arms inspections could not go on indefinitely without Baghdad's cooperation and declared for the first time that war could be the last resort.

But the 15 leaders, who have been bitterly divided over the Iraq crisis, failed to agree on how much time Baghdad should be given to rid itself of suspected weapons of mass destruction, saying the U.N. Security Council should decide.

A joint statement issued after a four-hour emergency summit said: "War is not inevitable. Force should be used only as a last resort. It is for the Iraqi regime to end this crisis by complying with the demands of the Security Council.

"Iraq has a final opportunity to resolve the crisis peacefully," the leaders said.

Germany Won't Support or Participate in War

Anti-war Germany went along with the statement even though Chancellor Gerhard Schroeder has insisted Germany would not support or participate in military action even if the Security Council backed it.

Schroeder told reporters the leaders had omitted a warning that "time is rapidly running out" at German insistence. Instead, they said the arms inspectors should be given the time and resources that the Security Council believes they need.

They also said the U.S. and British military buildup around Iraq had been vital in obtaining the return of arms inspectors and remained essential to achieve Baghdad's full cooperation in the disarmament effort.

European 'Mini-Crisis' over

Monday's agreement restored a greater degree of unity than many commentators had forecast after a month of feuding among EU leaders, with rival statements and open letters, gleefully fueled by Defense Secretary Donald Rumsfeld.

French President Jacques Chirac told reporters: "The European mini-crisis has been overcome."

But he launched a stinging attack on east European candidates for EU membership who had signed pro-American open letters on Iraq, branding them reckless and ungrateful, and saying they had "missed a great opportunity to shut up."

Transatlantic Rift Could Reopen

Diplomats said the EU's internal rifts could open again soon over the timing of any military action, with governments under fierce pressure from giant anti-war demonstrations.

European Commission President Romano Prodi said: "We cannot forget the millions in the streets this weekend. So we came together to send a message to the world: Europe is united and its distinctive voice must be heard."

The EU said it was committed to working with all its partners, especially the United States, to disarm Iraq.

Speaking at a news conference after meeting the leaders, U.N. Secretary-General Kofi Annan said transatlantic rifts must be repaired or else they would lead to long-term damage.

France, Germany and Belgium defused some transatlantic tension on the eve of the summit by lifting their month-long blockade of limited NATO measures to prepare to protect Turkey in case of war on Iraq.

European Parliament president Pat Cox said he had urged EU leaders to "cool it" and focus on Iraq rather than on internal disagreements.

"If there is a problem, it is in Baghdad and not Brussels," he said. "The recent debate has exposed the gap between our aspirations and our capabilities in the domain of a common foreign policy."

Annan echoed this message in an address to the EU leaders.

"I told them that we must keep the focus on Iraq and its obligation to disarm; on that critical point I think we are all agreed...

It is important that we focus on that principal task and avoid the tendency of turning on each other," he said.

Asked how much longer U.N. weapons inspections in Iraq could continue, Annan said there was no fixed deadline, "but at some stage the Council may decide that we're just wasting our time and we should call a halt to the inspections."

France, Britain Bicker

Not all was sweetness and light at the summit. Britain and France continued to bicker over the need for and timing of a second U.N. resolution that would declare Iraq had failed to cooperate with the inspectors and faced serious consequences.

Chirac said only the arms inspectors could determine when the process should end, and France would oppose a second U.N. resolution at this stage to authorize military action.

British Prime Minister Tony Blair said the issue was not a second resolution but the disarmament of Iraq.

"I think that most people understand that if that cannot be done peacefully it has to be done by force," Blair said on his arrival. He said the EU must send a message of strength, not weakness, to Saddam.

A Shy Appeal to Reinvigorate Mideast Peace Process

The EU statement also included an appeal to reinvigorate the peace process in the Middle East, demanding an end to violence and to the building of Israeli settlements in Palestinian areas.

Other Key Developments Concerning Iraq Crisis

*_ Iraq reported the first flight by an American U-2 surveillance plane in support of the U.N. weapons inspectors, marking another concession by Saddam to avoid a U.S.-led attack.

*_ U.N. weapons inspectors visited three factories involved in missile production as the United States focused on Iraq's missile program as a litmus test of its commitment to disarmament.

*_ Turkey's prime minister ruled out a parliamentary vote to allow tens of thousands of U.S. combat troops on its territory until Turkish and U.S. officials agree on the conditions of the deployment.

*_ Pope John Paul II's envoy to Baghdad said his meeting with Saddam convinced him that peace is possible and that the Iraqi leader is "very open to dialogue."

PHOTO CAPTION

German Chancellor Gerhard Schroeder briefs reporters at the end of a European Union heads of states summit in Brussels, Feb. 17, 2003. (Francois Lenoi