US Assistant Secretary of State Martin Indyk, quoted in the London-based Arabic newspaper Al-Hayat, said: "We are capable of confronting any threat [in the Middle East] without being affected by what is happening in Kosovo."

And he told the French news agency, AFP, that President Saddam Hussein "would be making a big mistake if he thinks we could not face up to a new challenge while we are busy with the Kosovo crisis."

The warnings came as Iraqi officials vowed that the fight would continue against the no-fly zones, which are policed by the United States and Britain.

Iraqi air defences have challenged US and British warplanes patrolling the north and south no-fly zones on an almost daily basis since Operation Desert Fox in December. Then, US and British forces bombed Iraq in response to Iraqi refusal to allow weapons inspectors full access to sites suspected of involvement in producing weapons of mass destruction.

But Iraq, which says the Nato action against Yugoslavia is "brutal aggression", has said it will continue challenging the no-fly zones.

Fadel Ibrahim al-Mashhadani, an official in northern Iraq of the ruling Ba'ath party told AFP: "The world should know that our decision to resist is legitimate."