BAGHDAD/WASHINGTON, 9 August — A defiant President Saddam Hussein said yesterday he was not scared by US threats to topple him and added that those who attack Iraq will be digging their own graves.

The White House reacted with contempt to Saddam’s saber-rattling and the United Nations said it gave no rise to optimism that Iraq would admit UN arms inspectors, seen as key to avoiding a possible war. The Los Angeles Times quoted current and former US intelligence officials as saying Saddam plans to avoid open desert fighting and mass his forces in major cities in case of a US invasion.

As Saddam’s speech was broadcast, thousands of Iraqis clad in military fatigues and clutching assault rifles paraded in Baghdad, denouncing the United States and vowing to defend Saddam to the death.

"The forces of evil will carry their coffins on their backs, die in disgraceful failure, taking their schemes back with them, or digging their own graves," Saddam said in the address marking the anniversary of the end of the disastrous 1980-88 Iran-Iraq war.

Saddam made no new offers on his dispute with the United States and the United Nations on letting arms inspectors back into the country to look for weapons of mass destruction. Instead, he sought an "equitable dialogue" with the United Nations and repeated his position that the UN Security Council should reply to a list of questions and honor its obligations on easing trade sanctions.

"The Iraqi government needs to comply with the responsibilities it agreed to at the end of the Gulf War," said Scott McClennan, a White House spokesman at President George W. Bush’s ranch in Crawford, Texas. "We are dismissing Saddam Hussein comments," said a senior official on the condition of anonymity. "They contain nothing new." UN Secretary-General Kofi Annan said he saw no sign in the speech of a shift in Iraq’s refusal to readmit inspectors and no cause for optimism unless there were "unforeseen developments". "I don’t see any change in attitude," Annan said.

The Los Angeles Times quoted defense analysts as saying Saddam’s strategy appears to center on drawing US forces into Baghdad and other cities, where his equipment and troops would be surrounded by civilians and less exposed to US warplanes, which played a major part in the Gulf War.

"Military targets in Baghdad are sprinkled among a population approaching 5 million. Saddam has constructed an elaborate warren of underground bunkers and escape routes," the Times reported.

The strategy was outlined in general terms to Iraqi regional officials. The statements were relayed from Iraq to US intelligence operatives through Iraqi defectors and opposition groups.

President Bush and his national security team were briefed on several options on Monday by Gen. Tommy Franks, head of US Central Command. Among those options was a plan in which the United States would strike Baghdad first in an attempt to separate Iraq’s military forces and equipment and cause a collapse of the regime, the newspaper said.

Britain’s opposition Conservatives for the first time added their voice to calls for a parliamentary debate on the anticipated US-led war. "At present we are keeping the option of a parliamentary recall under review," said David Davis, the party’s shadow deputy prime minister.

"However, the Conservative Party recognizes the importance of accountability within government," he said. "If the prime minister makes a decision on committing troops, he should recall Parliament to debate the matter."