Iraq appeared to be heading for another showdown with the West after the UN weapons inspector, Mr Richard Butler, abruptly cut short his visit to Baghdad yesterday, refusing to declare his work complete.
Iraq's Deputy Prime Minister, Mr Tariq Aziz, accused Mr Butler of playing "tricks and games" at the behest of the United States and engaging in "manoeuvre, protraction and blackmail".
Landing in Bahrain, Mr Butler said: "I was disappointed that Mr Aziz was not prepared to accept my suggestion of a further accelerated work programme.
"He demanded that I report to the Council that all disarmament is already completed.
"I don't have sufficient evidence to do that report . . . Naturally, I said I couldn't do what he asked."
The Iraqi News Agency also quoted him as saying in Baghdad: "It is very important that this issue should not be exaggerated, and I would refrain from using the word `crisis'." Mr Butler, an Australian, said he was flying to New York and would report to the Security Council tomorrow morning.
In Washington, a White House spokesman said the Iraqi President, Mr Saddam Hussein, was mistaken if he thought he could force the premature end of the sanctions and that all options were open for taking further actions.
The UN Secretary-General, Mr Kofi Annan, who brokered an end to the previous arms stand-off in February, said he hoped the breakdown of talks was "only a hiccup".
Mr Annan, who said he had spoken briefly with Mr Butler by phone, added that he was waiting until the diplomat returned to New York today and made a full report to him and the Security Council before making any further judgements.
He said he could not go into the reasons why Mr Butler decided to cut short his trip "but it was, from his point of view, that the talks have broken down and staying on any further wouldn't have achieved anything".
Asked whether he saw a new crisis with Iraq developing, Mr Annan replied: "Not necessarily, and I can't really say until I've got a full report."
Analysts said Mr Saddam could be gambling on halting inspections by the UN Special Commission and forcing an end to world economic sanctions without incurring another American military strike.
"Iraq has probably come to the conclusion that the West's will to threaten war has dissipated entirely, so why should it even go through the motions of co-operating with UNSCOM," said Mr Tim Trevan, a former political adviser to UNSCOM.
Britain, another permanent member of the Security Council with Russia and the US, said it was disappointed that "the Iraqi government's antics appear again to be thwarting UNSCOM's work".
In the February stand-off, Mr Annan averted threatened attacks against Iraq by a US armada massed in the Gulf by flying to Baghdad to negotiate a deal promising UN inspectors unimpeded access.
The crippling sanctions - including restrictions on oil exports - are unlikely to be lifted until Mr Butler tells the Security Council that Baghdad has eliminated all weapons of mass destruction.
Mr Butler said in Bahrain that his proposal would have brought this prospect much closer: "I told him [Aziz] that I believed that if we did that work programme for the next four or five weeks and experienced full Iraqi co-operation, I could have been in a position to report to the Security Council the end or very near the end of the missile and chemical weapons files."
Iraq later informed the United Nations that Baghdad would continue to co-operate with UN officials despite the breakdown of disarmamanet6 talks, an Iraqi diplomat said. The diplomat said in New York that Mr Aziz held a meeting yesterday in Baghdad with the UN special envoy, Mr Prakash Shah, during which he reassures the Indian diplomat that the co-operation would continue.