UN inspectors scrutinised more suspected weapons sites yesterday as an Iraqi daily denounced a US pact to upgrade military bases in Qatar as part of a paranoid American quest for global hegemony.

US Defence Secretary Donald Rumsfeld, who signed the deal with the tiny Gulf state on Wednesday, said there was no question that Iraq had weapons of mass destruction.

The issue, he told CNN in an interview in the Qatari capital Doha, was whether Baghdad had accepted that "the game is up" and would disarm in line with a tough UN resolution.

UN experts, absent for four years, have been working flat out since they resumed inspections in Iraq on November 27 to check Baghdad's assertion that it has no banned weapons. Inspectors from the International Atomic Energy Agency (IAEA) and the UN Monitoring, Verification and Inspection Commission (UNMOVIC) combed at least six sites yesterday.

Among them was a factory in a Baghdad suburb that previous UN inspectors listed as producing modified Scud missiles.

Destroyed in a 1993 US cruise missile attack and bombed again in 1998, Al-Nidaa Public Company now makes metal moulds, not missiles, according to its director, Khalil al-Nuaimi.

"Our specialty is not making rockets. Other companies used to make these rockets," he told reporters after an IAEA team had spent two and a half hours at the heavily guarded facility, run by Iraq's Military Industrialisation Commission.

General Hussam Mohammed Amin, the chief Iraqi official who liaises with the inspectors, told a news conference that Iraq had had "no Scud missiles, zero Scuds" since summer 1991.

Amin, head of the National Monitoring Directorate, praised the professionalism of the UN experts, noting that they had refrained from carrying out inspections during the two-day religious holiday ending the Muslim fasting month of Ramadan.

His comments contrasted with remarks by Vice-President Taha Yassin Ramadan who last week accused the inspectors of spying for Israel and the United States.

Iraqi officials said inspectors had also gone to a disused medicine factory, a missile test pad, a chemicals plant and another factory yesterday. An IAEA team spent a second day at Ibn Sina, a former uranium enrichment plant north of Baghdad.

Iraq submitted a 12,000-page dossier on its arms programmes to the United Nations last Saturday in line with a Security Council resolution threatening serious consequences if it did not come clean and cooperate with the inspectors.

The United States has been building up its forces in the region in preparation for a possible war with Iraq.

Rumsfeld said the pact with Qatar would improve military readiness, but denied it was connected to the Iraq crisis. The United States also has bases in Saudi Arabia and other Gulf countries south of Iraq, as well as in Turkey to the north.

Rumsfeld's remarks cut little ice in Baghdad, where the official al-Thawra daily said the purpose of US military bases in the Gulf was to redraw the map of the Middle East.

"America wants to control the world at any cost," it said. "Its paranoia is driving its fictitious colonialist plans."

Rumsfeld said oil was not driving Washington's Middle East policy and its fight against terror.

"It's a misunderstanding to think that the United States interest in this part of the globe begins and ends with oil. It isn't true," he told US troops in Qatar, part of a region that contains 45 percent of the world's proven oil reserves.

"When the dust settles, whoever owns oil is going to want to sell it," Rumsfeld declared at a base outside Doha.

Iraqi Oil Minister Amir Muhammed Rasheed, speaking ahead of an OPEC meeting in Vienna, derided as "childish" reports that Iraq had ringed its oil fields with mines in case of a US attack. Iraq, he said, would try to keep oil exports flowing as it had done when bombed by the United States in 1998.

In a snub to Russia, once its biggest arms supplier, Iraq has terminated a $3.7 billion contract with Russian firm LUKOIL to develop its giant West Qurna oilfield.

LUKOIL spokesman Alexander Vasilenko said an Iraqi deputy oil minister had informed the company of this in a letter.

"We do not understand how a petty bureaucrat from the oil ministry of Iraq can cancel a law which has been passed by Iraq's parliament," he said in Moscow.

The World Bank said a US war on Iraq in the next few months could send crude oil prices soaring over $40 a barrel, but a post-conflict glut could drive them below $20.

The Washington Post reported yesterday that the Bush administration had a credible report that Islamic militants linked to al Qaeda received a chemical weapon in Iraq in November or late October.

Amin dismissed the report, saying all Iraq's stockpiles of chemical weapons had been destroyed in the early 1990s.

"This is a really ridiculous assumption from the American administration because they know very well we have no prohibited material or prohibited activities," he told a news conference when asked about the Washington Post report.

The United States has sought to link Iraq with Osama bin Laden's al Qaeda network, without producing evidence.

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