US President George W Bush has given the United Nations Security Council one more day to agree to a resolution demanding Iraq's immediate disarmament.
Bush is expected to address the American people on Monday
"Tomorrow is a moment of truth for the world," Mr Bush said after emergency talks with his two staunchest allies, the UK and Spanish leaders, in the Azores.
"The Iraqi regime will disarm itself or the Iraqi regime will be disarmed by force - and the regime has not disarmed itself, " Mr Bush said.
The British Prime Minister, Tony Blair, said there would be a final round of contacts on Monday to try to help break the "impasse" between Britain, the US and Spain on the one side and anti-war countries like France and Russia.
The UN's chief weapons inspector Hans Blix, meanwhile, said he should be ready by Monday to submit a programme to the Security Council for the completion of the disarmament process in Iraq.
Doctor Blix called the situation "very threatening", but he said that unless there was a sudden decision to withdraw the UN team from Iraq, inspectors would continue to work as normal.
The US is pulling out all non-essential diplomatic staff and their families from Israel, Syria and Kuwait.
The State Department said this was "due to the threat of a possible war with Iraq".
The leaders did not specify whether they would proceed with a Security Council vote if it appeared that the new resolution would fail.
"People have got to decide whether they are going to allow any second resolution to have teeth, to make it clear that there is a real ultimatum in it, and that's what we
need to find out overnight," said Mr Blair.
But French President Jacques Chirac has repeated that his country will veto any UN resolution which paves the way for war on Iraq.
In a US television interview, Mr Chirac said "we should pursue [diplomacy] until we've come to a dead end".
US officials have indicated that once diplomacy was exhausted, Washington would move to a war footing.
Mr Bush is expected to address the American people, possibly as early as Monday night, issuing a final ultimatum to Saddam Hussein.
Iraqi Foreign Minister Naji Sabri told an Arabic television station that tens of thousands of Iraqi men and women were ready to be martyrs for any war against the American enemies.
"We are preparing ourselves as if war is happening in an hour. For months we've been preparing ourselves for this possibility. Our enemy is treacherous," Mr Sabri told the al-Arabiya satellite channel.
Saddam Hussein, speaking before the Azores summit, warned that if Iraq were attacked the battle would be "wherever there is sky, land and water in the entire world."
After an hour of talks, the three leaders emerged not only to deliver their ultimatum but to point to their vision of a post-Saddam Iraq.
Mr Blair called on the international community to unite to give Saddam Hussein a clear ultimatum.
He pledged that in the event of war, Iraq's territorial integrity would be protected and the country's natural resources would be used for the benefit of the Iraqi people.
His Spanish counterpart, Jose Maria Aznar, said they were willing to make one last effort for peace. If Saddam Hussein wanted to prevent a war, he said, he should do it now by disarming.
Mr Bush said he would go back to the UN to seek co-operation on rebuilding Iraq if war is declared.
"We're committed to a goal of a united Iraq with democratic institution in which members of all ethnic and religious groups are treated with dignity and respect," Mr Bush said.
In other developments:
In Iraq, officials have given the UN photographs and videotapes of mobile laboratories which they say show that mobile laboratories are harmless and not part of a production line for germ warfare, as alleged by Britain and the US.
- Pope John Paul appeals for a peaceful resolution to the crisis, saying: "There is still time to negotiate, there is
still space for peace"
- Germany urges its citizens to leave Iraq "immediately" and prepares to close its embassy in Baghdad
The Iraqi authorities have invited Mr Blix and his fellow chief inspector, Mohamed ElBaradei, to Baghdad for urgent talks, but no response is expected before Monday.
Both Iraq and its opponents are meanwhile finalising their military preparations.
On Saturday, Saddam Hussein put Iraq on a war footing, dividing it into four zones.
US forces in the Gulf now top what our Pentagon correspondent calls the "magic number" of 250,000 personnel and both US and UK forces say they are ready for any military assault.