BBC Diplomatic Correspondent Brian Hanrahan: "There is a faint flicker in Iraq's hard line"

As US aircraft, troops and warships continued to move into the Gulf over Iraq's refusal to allow inspections to continue, the official Iraqi news agency quoted Saddam Hussein as saying he did not want a crisis over United Nations weapons inspections - but a response to "just demands" for sanctions to be lifted.

Hours after the Iraqi leader made his statement, the United Nations' Security Council went into special session to discuss the crisis.

UN Secretary General Kofi Annan has already said that he has "no plans" to take up an Iraqi offer of a repeat of his eleventh hour Baghdad mission in February which averted air strikes over non-compliance with inspections.

Life goes on: No panic in Baghdad

Meanwhile the Americans have been making clear their determination to go ahead with air strikes unless Iraq backs down.

President Bill Clinton said the Security Council and the world had made it "crystal clear" to Saddam Hussein that his actions were unacceptable.

He said that there had been three months of efforts to secure a diplomatic solution which would allow the UN weapons inspections team, Unscom, to finish its work ahead of a possible lifting of sanctions.

'It's up to him'

US Secretary of State Madeleine Albright earlier warned Saddam Hussein to stand down publicly or face air strikes.

Richard Lister reports from Washington on the latest US warnings

The Iraqi president's failure to comply with the United Nations' weapons inspectors was "disingenuous, dishonest and despicable", said Mrs Albright.

"It is up to him (Saddam), whether he chooses to do what the world is asking of him," said Mrs Albright.

"Any (military) action is motivated by our desire to counter threats to peace."

She accused Iraq of having incompatible goals of retaining weapons of mass destruction and having economic sanctions lifted.

And she rejected Baghdad proposals for UN Secretary-General Kofi Annan to broker a fresh last-minute deal.

"Frankly Kofi Annan did a very important piece of diplomatic work," she said.

Richard Downes in Baghdad: "The Russian letter is the only diplomatic move"

"He worked out an agreement and Saddam violated that agreement.

"I do not see that there is much that can be done if (Saddam) violates agreements that he makes."

Compliance with Unscom's work was vital because questions continued to exist over Iraq's nuclear, chemical and biological warfare capabilities, said Mrs Albright.

Neighbours appeal to Saddam

Tariq Aziz: "It is the US that is not complying with UN resolutions"

Russia's President Boris Yeltsin, who is opposed to military action, wrote to the Iraqi leader earlier on Friday, urging him to allow weapon inspections to continue.

Eight Arab states have also appealed to Baghdad to back down.

A statement from Egypt, Syria and the six Gulf states called on Iraq to be reasonable, warning that it alone would be responsible for the consequences.

Iraqi Deputy Prime Minister Tariq Aziz dismissed the warning, saying Arab countries should stick together.

Warning signs

Tony Blair: "If he doesn't back down, action will follow"

The UK Government has advised its nationals to leave the region immediately with many already arriving home.

The US State Department has also ordered the departure of its non-essential diplomatic staff from Israel, which suffered Iraqi missile attacks during the 1991 Gulf War.

Israel has responded to the possibility of air strikes by distributing gas masks.