HIGHLIGHTS: Baghdad Preparing for the "Worst"||Iraq Warns Neighbours of Dangers they Face Too if U.S. Attacks||U.S. to Free Eight Million Dollars for Iraqi Opposition|| STORY: A top Iraqi official said in remarks broadcast on Thursday that Baghdad was ready to discuss the return of U.N. arms inspectors provided the talks are not preceded by any conditions.

In what appeared to be another bid by Iraqi President Saddam Hussein's government to stave off a possible U.S. strike, Vice President Taha Yassin Ramadan told Abu Dhabi Television in an interview Iraq was "open for dialogue" with the United Nations.

But he also said Baghdad was preparing for the "worst" in case Washington decided to attack its 1991 Gulf War foe.

Yassin's comments followed similar remarks by Information Minister Mohammed Saeed al Sahaf who said in another interview broadcast this week that Iraq was willing to discuss the inspections and other issues with the United Nations.

Iraq held three rounds of talks this year with U.N. Secretary-General Kofi Annan to discuss the inspectors' return.

IRAQ WARNS NEIGHBOURS OF DANGERS THEY FACE TOO IF U.S. ATTACKS

Iraq sent neighbours such as Turkey and Iran a wake-up warning about the risks they run if Washington attacks Baghdad, as the US kept up pressure on the regime.

US President George Bush's national security adviser led the verbal broadsides Thursday saying the West does not have "the luxury of doing nothing" about President Saddam Hussein.

However, Iraq put the spotlight on the dangers to which Washington's war-mongering exposes the region.

"Our Arab neighbours and others who willingly or unwillingly allow themselves to be carried along by the current of American arrogance and bend blindly to US plots must understand that US interests make no distinction between one side or another and if one is targeted today, the turn of others will come tomorrow or the day after," the influential daily Babel said.

"The greatest loss for Turkey will be its relations with Iraq," said the newspaper run by Saddam's powerful elder son Uday.

"No one, not even the Americans, can compensate for what we have given to Turkey," the daily stressed, presumably referring to cheap oil and general cross-border trade.

Other countries, of which only Iran was named, "will be threatened with break up, loss of strategic depth or will become a substitute homeland for the Palestinians to solve their conflict with the Zionists."

The tabloid accused unnamed countries of "courting" Washington or "sticking their heads in the sand so as not to see the trouble caused by this evil administration."

"Shame on those who say in their media that they are against an attack (on Iraq) when they have submitted shamefully (to Washington) even before the American boot steps on their soil."

Jordan's King Abdullah II, in a televised address to his nation later Thursday, said the Iraqi leadership bears the responsibility of its choices concerning its conflict with the United States.

U.S. TO FREE UP EIGHT MILLION DOLLARS FOR IRAQI OPPOSITION

The United States is "anxious" to boost support for a leading Iraqi opposition group and said that a deal was near to free up 8 million of dollars in assistance for it that is now on hold.

The State Department said it believed paperwork would soon be completed to allow an eight-million-dollar grant for the Iraqi National Congress (INC) to go through after a three-month delay.

The money is to go to fund the INC newspaper, television station, regional offices, including an office of humanitarian relief, U.S. deputy spokesman Philip Reeker said.

Reeker's comments came a week after representatives of six Iraqi opposition groups, including the INC, met here with senior US officials including Secretary of State Colin Powell and Defense Secretary Donald Rumsfeld to discuss ways in which Saddam Hussein could be ousted.

PHOTO CAPTION

Saddam Hussein and the Revolutionary Command Council agreed unanimously August 15, 2002 that the Iraqi leader should seek another term as president in a referendum set for later this year. Sadddam is seen with an unidentified aide on August 10 while viewing his April 28 birthday gifts on display at a museum. Photo by Reuters (Handout)
- Aug 15 7:50 AM ET