Rallying behind US President George W. Bush as he prepared to make his case for war on Iraq to Americans and sceptical allies yesterday, staunch ally Britain said Baghdad was in "material breach" of UN demands that it give up weapons of mass destruction

Warning Iraq to stop its "gameplaying," British Foreign Secretary Jack Straw's tough condemnation of Baghdad's flouting of UN resolutions echoed Washington's stance for the first time with legalistic wording that lays Iraq open to an attack.

Bush was expected to use his televised State of the Union address to Congress at 9 p.m. (0200 GMT today) to argue that war is becoming unavoidable after weapons inspectors told the United Nations on Monday that Iraq was dragging its feet in meeting their demands.

The US president's arguments have so far left many countries unconvinced that Iraq poses an immediate threat to its neighbours and could arm anti-Western groups like those that carried out the September 11 attacks.

Many US allies have called for the inspectors to be given more time to work in Iraq and yesterday the the chief UN weapons inspector said he would welcome this if the UN Security Council offered it.

Hans Blix made the comment in a video conference from New York with senior members of the European Parliament.

"I think he was anxious to establish in our minds that he himself and UNMOVIC (the UN arms monitoring agency) have not directly asked for an extension, but that if one is offered by the Security Council, they would welcome that," European Parliament President Pat Cox told reporters afterward.

US officials said Secretary of State Colin Powell may present new intelligence of Iraqi weapons of mass destruction to the Security Council next week to try to rally US allies.

One sign of a shift came when Russia, a veto-wielding member of the council, signalled a tougher line against Baghdad, urging it not to hamper the inspectors' work.

In Iraq, President Saddam Hussein warned army officers to be vigilant for any sign of treason. Washington has backed the idea of amnesty for senior Iraqis to encourage a change of leadership that could make a war unnecessary.

"Treason is an unmanly act ... It does not frighten. However, in times of inattention, it may produce a treacherous act," newspapers quoted Saddam as telling a group of officers.

Iraqi Deputy Prime Minister Tareq Aziz said Baghdad was prepared to improve cooperation with the inspectors but said it had handed out hundreds of thousands of weapons and would attack American troops in neighboring Kuwait if necessary.

"They will be received with bullets, not flowers," Aziz told Canada's CBC television in an interview in Baghdad.

On world markets, analysts said the inspectors' report seemed to make war virtually inevitable and they were looking to Bush's speech for an idea of a start date, with estimates focusing on early March.

Oil prices rose after Iraq said it could target Kuwait, an important petroleum producer, if US troops attacked from there. The recent rise in gold prices was put on hold and Wall Street investors avoided making big bets ahead of Bush's keenly anticipated speech.

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