With a United States-led attack on Iraq looking imminent, a defiant President Saddam Hussein on Monday threatened a war wherever "there is sky, land and water".

In a televised meeting, he told senior military officials, "If god wants... we will fight them with daggers, swords and sticks if other arms are scarce."

Saddam sidestepped the military chain of command to place one of his sons and three other aides in charge of the defence of the nation. The decree placed Iraq on a war footing.

He also denied British and US allegations that his country had weapons of mass destruction.

"Are weapons of mass destruction a needle that can be hidden in a head cap or a head dress of an old women at home and inspectors cannot find them?" he asked.

Meanwhile, the UN observer mission along the Iraqi border ceased operations and pulled out its staff while the US, Britain, Russia, Germany, Australia and several other countries asked their nationals and non-essential diplomats and their families to leave Iraq.

India also closed its embassy in Baghdad and its staff shifted to Jordan.