Saddam's posturing raises fears Iraq is out to settle scores

Western capitals are becoming increasingly anxious that the Iraqi President, Saddam Hussein, may be about to spring a new challenge in his attempt to break out of the international sanctions regime.

Western capitals are becoming increasingly anxious that the Iraqi President, Saddam Hussein, may be about to spring a new challenge in his attempt to break out of the international sanctions regime.

There are mounting fears that Iraq, which has regained its status as one of the world's leading oil producers, might be tempted to exploit the fuel crisis to try to settle grievances. Diplomats point to recent actions by Baghdad, including an illegal incursion by an Iraqi fighter aircraft into Saudi Arabia's airspace last week. One scenario has President Saddam shutting down his oil exports, addingto price pressures.

"He's not going to do that," Robin Cook, the Foreign Secretary, said at United Nations headquarters in New York on Thursday. "He likes his money too much." Of the 75 million barrels of oil exported on to the world market daily, about 2.5 million flow from wells in Iraq.

Concern spread on Thursday after Iraq accused Kuwait of stealing its oil. It was just such an allegation that led to the invasion of its neighbour in 1990, which triggered the Gulf War. Iraq does not recognise Kuwaiti sovereignty.

Lieutenant-General Amir Muhammad Rashid, Iraq's Oil Minister, was quoted as saying Kuwait was "practising an act of sabotage against Iraqi oilfields by digging oil wells in a joint zone in order to deplete Iraqi underground oil reserve".

In New York, the Kuwaiti Foreign Minister, Sheikh Sabah al-Ahmed al-Sabah, denied the charge. "We haven't stolen anything. If you take from your own land it can't be stealing."

In a stern warning to Iraq, the US Secretary of State, Madeleine Albright, said: "We do have a credible force in the region and are prepared to use it in an appropriate way at a time of our choosing."

* The Clinton administration is to provide $4m (£2.8m) to political foes of President Saddam, to help them try to end his rule, a senior US State Department official said.