United States President George W Bush on Monday night [2000 EST, 0630 IST] asked Saddam Hussein, his two sons Qusay and Uday and key advisers to leave Iraq within 48 hours or face war -- a demand rejected by Iraqi Foreign Minister Naji Sabri.

Sabri called Bush a "crazy man" and suggested that he step down.

In a 13-minute televised address to the American nation, the president said, "Events in Iraq have reached final days for decision."

For more than a decade the US and others had pursued peaceful efforts to disarm Iraq, he said. "Since then the world has engaged in 12 years of diplomacy...

"[Iraq] has uniformly defied Security Council resolutions demanding full disarmament. Over the years, UN weapons inspectors have been threatened by Iraqi officials, electronically bugged and systematically deceived. Peaceful efforts to disarm the Iraq regime have failed again and again because we are not dealing with peaceful men.

"Intelligence gathered by this and other governments leaves no doubt that the Iraq regime continues to possess and conceal some of the most lethal weapons ever devised. This regime has already used weapons of mass destruction against Iraq's neighbors and against Iraq's people," Bush said.

The Iraqi regime had a history of "reckless aggression" in West Asia, he said. "It has a deep hatred of America and our friends, and it has aided, trained and harboured terrorists, including operatives of Al Qaeda.

"The danger is clear: Using chemical, biological or, one day, nuclear weapons obtained with the help of Iraq, the terrorists could fulfil their stated ambitions and kill thousands or hundreds of thousands of innocent people in our country or any other.

"The Americans have not done anything to deserve or invite this threat, but we will do everything to stop it. Instead of drifting along toward tragedy, we will set a course toward safety," the president said.

Observing that the United Nations had failed to live upto its expectations, Bush said, "Iraq will not disarm as long as Saddam holds onto power.

"Terrorism will diminish the moment Saddam is gone."

Bush also sent a message to Iraqis, stressing that any military action would be directed against the "lawless men" in power.

"As our coalition takes away their power, we will deliver the food and medicine you need.

"We will tear down the apparatus of terror and we will help you to build a new Iraq that is prosperous and free.

"The tyrant will soon be gone; the day of your liberation is near." he said.

Addressed the Iraqi mililtary, he asked them not to "fight for a dying regime that is not worth your life". "It is not too late... in any conflict your fate will depend on your actions."

Bush urged the Iraqi troops not to obey any order to use weapons of mass destruction and said: "Do not destroy oil wells, a source of wealth that belongs to the Iraqi people.

"It is too late for Saddam Hussein to remain in power; it is not too late for the Iraqi military to act with honour and protect your country by permitting the peaceful entry of coalition forces to eliminate weapons of mass destruction."

He said war criminals would be prosecuted and it would be no good for them to argue that they had only been following orders.

Earlier in the day, all diplomatic avenues to resolve the crisis peacefully came to an end with the US, Britain and Spain withdrawing plans for a new UN resolution in the face of fresh threats by France to veto it, come what may.

Following the breakdown of talks, Secretary-General Kofi Annan said, "I have just informed the council that we will withdraw the UNMOVIC [United Nations Monitoring, Verification and Inspection Commission] and atomic agency inspectors. We will withdraw the UN humanitarian workers."

A war against Iraq without UN backing would lack legitimacy, the secretary general said.

Shortly afterwards, the US and its allies directly blamed France for the impasse.

The American Ambassador to the UN, John Negroponte, said he thought the Security Council vote "would have been close" had France not threatened to veto. "We regret that in the face of an explicit threat to veto, the vote-counting became a secondary consideration," he said.

British Ambassador to the UN Sir Jeremy Greenstock said: "The co-sponsors reserve the right to take their own steps to secure the disarmament of Iraq."

The ambassador said the allies could not agree to the alternative plan suggested by "one country" to secure Iraq's compliance with Resolution 1441.

The French Ambassador, Jean-Marc de La Sabliere, said, "The majority of the council confirmed they do not want a use of force."

OTHER DEVELOPMENTS

• Among others, fifty-odd Indians in Baghdad started leaving on Monday. "There are no Indian staff now in the Indian embassy in Baghdad. Except for some 12 Indian businessmen from the private sector, the rest have left the country," Ambassador B B Tyagi said. "The embassy will be open and managed by seven local Iraqi staff," Tyagi, who reached Amman by road on Sunday night, said.
• Terror alert level in the US was raised to Orange [second-highest level] because of fears that terrorists will attack due to a possible military action against Iraq.
• The Turkish government said it would reconsider a request by the US for about 60,000 troops to use its soil. Turkish president, prime minister, foreign minister, chief of the armed forces and other officials met to discuss the issue. Turkish parliamentarians had voted against such a plan earlier this month.
• In Baghdad, Saddam promised 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 side-stepped the military chain of command to place one of his sons and three other aides in charge of the defence of the nation. He also denied British and US allegations that his country had weapons of mass destruction.
• In London, Prime Minister Blair faced a political crisis. Much of his Labour Party opposed war and Leader of the House of Commons Robin Cook resigned in protest. At least one more minister was expected to follow.
• Australia said it would commit troops to the US-led coalition. "This decision was taken at a cabinet meeting. following a telephone discussion between myself and President Bush," Prime Minister John Howard said in Canberra. "I am very conscious of how difficult this issue is for many people in Australia. I respect the fact that not all will agree with me. I ask them to understand that this government has taken a decision which it genuinely believes is in the medium and longer term interest of the country," Howard said.
• But Canada offered no such help. During a discussion in the Canadian parliament, Prime Minister Jean Chretien cautioned against going to war without UN backing.