Switzerland is mounting its biggest security operation for the world's business and political elite who gather this week at the Davos ski resort, with any plane straying overhead risking being shot down.

Hundreds of police and around 300 soldiers will be deployed in and around the chic mountain city for the January 23-28 World Economic Forum (WEF). Troops in neighbouring Germany are on standby in case of need, police sources said.

The aim is not only to protect international figures such as US Secretary of State Colin Powell and Brazil's new President Luiz Inacio Lula da Silva from extremist attack, the resort is also bracing for anti-globalisation or anti-war protests.

Unlike in 2001 - last year the event switched to New York as a mark of respect after the September 2001 suicide plane hijackings - demonstrations will be allowed in Davos, Europe's highest city at 1,500 metres.

The WEF meeting comes amid mounting international tension over Iraq, with United Nations weapon inspectors due to report to the Security Council on January 27 on their search for Baghdad's alleged weapons of mass destruction.

Washington, which has threatened war if Iraq does not come clean over its alleged nuclear, chemical and biological weapons, says the report could be crucial.

Last Sunday, police in Davos found a small explosive device containing a firecracker and an automatic fuse near the Davos Congress Centre where the WEF meeting will be held.

WEF organisers, police and the Swiss government played down the threat from violent political extremists bent on striking a high-profile blow.

"The fact that personalities like the US Attorney General and others are participating should show you that this question has been taken care of," WEF founder Klaus Schwab told journalists.

The security measures will cost the Swiss authorities some $10 million, around $5,000 for each of the 2,000 leaders of finance, business and politics due to attend.

The resort is not on the route of commercial airlines and any light plane seeking to overfly it could be shot down by Swiss fighters if it ignores orders to change course, Swiss government officials said.

The several thousand protesters expected in Davos for Saturday's main demonstration will have to run a gauntlet of police checks.

"We are expecting large difficulties (in getting to Davos). At the moment we have permission to demonstrate, but no permission to allow demonstrators to get to Davos," Walter Angst from the Oltner Buendnis protest movement told Reuters.

Police are setting up checkpoints in the narrow valley that leads to Davos and travellers will be searched for weapons or potentially dangerous objects.

At the main checkpoint midway up the valley, train and bus passengers must disembark and enter a fenced area where they will be searched before being allowed to board a train to Davos.

The government came in for heavy criticism from both civil rights groups and the media for banning protests in Davos in 2001 when riots erupted in other Swiss cities, particularly Zurich.

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