Kofi Annan: Best we can say is that all-out war has been avoided for the time being

Mr Annan made the remarks at a news conference on the activities of the UN in 1998.

"The best we can say is that in Kosovo, and in Iraq, all-out war has been avoided for the time being. But unless people abide by their commitments, and unless they redouble their efforts to find peaceful solutions, we have every reason to fear the worst in 1999," he said.

He urged both Iraq and the chief UN weapons inspector, Richard Butler, to tone down their rhetoric on the dispute over whether Iraq possesses weapons of mass destruction and develop a working relationship.

"There should be no rhetoric when we have serious and hard work to do," he said.

"I do not condone what Iraq has been saying, I just want them to get on with the job, get on with disarmament, cooperate with Unscom (UN Special Commission on Iraqi disarmament) and get it done."

The secretary-general also warned of the risks to stability posed by continuing turmoil in world markets.

Mr Annan spoke of the UN difficulties in tackling conflicts in Angola, and the Democratic Republic of Congo. He said Libya was close to making a decision to surrender the two suspects of the Lockerbie bombing in Scotland 1988.

• In brief

• Economic turmoil: Unless underlying problems with the global economy are addressed "we must expect more conflicts."

• Lockerbie: "I think they (the Libyan authorities) will move in the right direction. My sense is that they have realised that they have come to the end of the road."

• Africa: "We have had some difficulties attracting governments to join peacekeeping operations ... but we should not give up."