Iraqi President Saddam Hussein has put a general notorious for his involvement in the gassing of the Kurds in charge of stopping any southern invasion.
US and UK troops have trained in chemical protection suits
A BBC correspondent in Baghdad, Andrew Gilligan, says the appointment of General Ali Hassan al-Majid to command Basra could be aimed at intimidating US and UK troops expected to invade that area should war be declared.
General Majid - a cousin of Saddam Hussein - is known as "Chemical Ali" for his role in the attacks on Kurds in northern Iraq in 1988 in which at least 5,000 people were killed in a single day.
His new responsibility was announced in a presidential decree that divided Iraq into four military commands and put the country on a war footing.
Our correspondent says government buildings in Baghdad are now being cleared of personnel and equipment, in the expectation that they will be bombed.
ALI HASSAN AL-MAJID
Cousin of Saddam Hussein
Allegedly orchestrated gassing of Kurdish villages to stop rebellion
Appointed Kuwait governor after 1990 invasion
Accused by US of brutally suppressing 1991 Shia uprising in southern Iraq
"[Iraqi officials] now seem to believe a war is imminent, although there have been remarkably few moves made to actually defend Baghdad - a few piles of sandbags in the streets, but no real sign of troop movements or artillery pieces being moved into place," he says.
United Nations weapons inspectors have been continuing their work in Iraq - visiting sites and overseeing destruction of illegal arms - despite the ever-increasing tension.
But on Sunday, five of the eight helicopters used by the teams were flown out of Iraq after an insurance company refused to cover them any longer, Iraqi officials said.
Analysts say any mass withdrawal of the inspectors themselves would be a clear sign that the UN believes war is about to start.
Saddam's decree - read out on national media - outlined requirements deemed necessary "to confront and destroy any foreign aggression".
The president retains control of the air force, gunship corps and surface-to-surface missiles.
The four regional commands - who report directly to Saddam - are:
- The north - including important oil fields - controlled by General Izzat Ibrahim
- The south - including Basra - controlled by General Ali Hassan al-Majid
- The central Euphrates area - controlled by Mizban Khadr Hadi
- The central area - including Baghdad and Saddam's hometown Tikrit - controlled by Saddam's son Qusay
Qusay Hussein is also in charge of the elite Republican Guards.
Saddam's elder son, Uday, will run the internal security forces and will co-ordinate orders from the command of every region if communications with central command are disrupted, the decree says.
The US and UK have now amassed nearly 250,000 troops in the Gulf, ready to strike if ordered.