Rageh Omaar reports: Saddam said allied air strikes were a triumph for Iraq

In a defiant speech broadcast across the Arab world on the eighth anniversary of the Gulf War, he said Iraq felt it necessary "that an institutional gathering be established with agreed rules and conventions by willing member states in the world, starting with the Orient".

Washington and London launched four nights of air strikes on Iraq in December, and British and US aircraft enforcing no-fly zones over the country have been involved in a series of clashes in recent weeks.

'Not intended as threat'

The president, speaking on the Arab News Network satellite television channel, said the new grouping would counterbalance Nato and other Western alliances, but would not challenge anybody in particular.

Saddam: Grouping should be ready to protect security of its members

"Nevertheless it should be ready to protect its member states and rightly defend the security and the interests of its members as well as international security in accordance with correct humanitarian standards," he said.

"Furthermore, some other factors for this move lie in the fact that America, Britain and Zionism ... with all those who assist and cooperate with them, have become a threat to the security and stability of the world."

The Iraqi president also referred to the intrigues of "some Arab rulers, who are of similar nature to those enemies", without naming any countries.

He urged all Arab countries to join the new grouping, saying Baghdad was ready for a dialogue with all interested parties to work out a charter.

Gulf War anniversary

The speech was televised on the day Iraq marked the start of what it calls the "Mother of All Battles" - the six-week Gulf War by a US-led coalition in 1991 to free Kuwait from Iraqi occupation.

Saddam described the US and British air strikes last month as Iraq's "Day of Triumph".

He reviewed Iraq's progress since his Baath party came to power in 1968, saying that his country's enemies felt threatened by the achievements.