Saddam warns thousands of 'martyrs' are ready to fight America

Iraq responded to the looming threat of war last night with a warning that tens of thousands of Iraqi men and women had volunteered as "martyrs in the battle with the American enemy".

Within minutes of the end of the Azores summit, the leadership in Baghdad turned on the battlefield rhetoric and said it was ready to fight at an hour's notice, if necessary. It raised the spectre of suicide bombers wreaking havoc on American and British targets around the globe, as well as the possibility that chemical and biological weapons might be used on troops massing on Iraq's southern border.

In a meeting with senior military officers, Saddam Hussein raged against what he called the "great lie" that Iraq still had weapons of mass destruction in defiance of United Nations resolutions. He denounced the United States as the unappointed "unjust judge of the world" and promised that his country would emerge victorious from any conflict.

"When the enemy opens the war on a large scale it should realise the battle between us will be waged wherever there is sky, earth and water anywhere in the world," he said.

Naji Sabri, the Iraqi Foreign Minister, said: "We are preparing ourselves as if war is happening in an hour. For months we've been preparing ourselves for this possibility. Our enemy is treacherous."

In addition to Iraq's 390,000 soldiers, Mr Sabri said a further seven million people had been trained in weaponry. "All are working to preserve national honour," he said.

Earlier, Iraq was placed on an official war footing as President Saddam divided his country into four military regions and placed his son Qusay in control of the two cities where fighting is expected to be the most fierce if there is a US-led war. Qusay will personally direct the defence of Baghdad and the Iraqi leader's home town of Tikrit.

President Saddam, as well as retaining the position of supreme commander, holds the sole authority to order the use of surface-to-surface missiles and what is left of the Iraqi air force. Other elements of President Saddam's military preparations yesterday included the appointment of his cousin Ali Hassan al-Majid –who earned the nickname Chemical Ali for his part in the gassing of Kurds – as military commander of Basra.

A joint Iranian-Syrian statement last night poured scorn on President George Bush's stated ambition to establish democracy in Iraq. "Democracy is not mandatory," it said. "The fate of Iraq must be decided by its own people through participation of all tribes and groups."