BAGHDAD, Jan 6: Iraqi President Saddam Hussein on Monday declared his country ready for war and issued his first public criticism of UN weapons inspectors, accusing them of spying.

In a 25-minute televised Army Day message, Saddam dismissed US threats to disarm Iraq as “clamour, commotion and hysteria” to divert attention from US domestic and foreign policy failures, and the Israeli occupation of Palestinian territories.

“As we monitor the hiss of snakes and bark of dogs accompanied by continued aggression in the north and south of the country, we act with the confidence of the assured whose actions are not hurried or confused,” he said.

“Here, we have prepared for everything.”

During an address commemorating the founding of the Iraqi army in 1921, Saddam issued his first public criticism of the UN teams.

He said rather than searching for weapons of mass destruction, the inspectors were instead compiling lists of Iraqi scientists, asking workers misleading questions, and gathering information about “legitimate military production... These things, or most of them, are pure intelligence work”.

Shortly after the Iraqi leader spoke, US army officials said the military had alerted more than 10,000 part-time troops to prepare for active duty and possible movement overseas as early as this week to support the US buildup.

The alert came as a US navy hospital ship headed to the region to handle casualties in the event of a war.

MARKETS ON EDGE: The prospect of conflict in the Gulf kept world markets on edge. Safe haven gold hit its highest level in almost six years, oil hovered near a two-year peak and the dollar dipped.