Iraq vowed to carry on its "heroic struggle" against the US and Britain yesterday, saying its missiles were primed to strike a day after US warplanes attacked an Iraqi anti-aircraft battery.
While Washington dismissed as "propaganda" Iraqi claims that Iraqi gunners shot down a US jet patrolling over northern Iraq on Monday, Iraq hurled new threats and insults.
"The Iraqis will carry on their heroic struggle against the enemies of God and freedom," said Mr Ezzat Ibrahim, the deputy chairman of the Revolutionary Command Council (RCC), the country's highest decision-making body.
The Iraqi Defence Minister, Mr Sultan Hashem, added: "The [Iraqi] fighters are more than ever determined to confront the enemies of God and humanity among the Americans, British and Zionists.
"Our armed forces are ready, and we have as many missiles" as the enemy, he claimed.
Iraq, which said four of its soldiers were killed and seven wounded when US jets pounded an anti-aircraft battery in Monday's confrontation, has said it does not recognise the no-fly zones and will fire on intruders.
A US State Department official in Washington said patrols over the no-fly zones would continue as normal in a bid to "keep Iraq in its box".
"Iraq is trying to provoke and fabricate and do whatever it can to evade what it has to do," said the official, who asked not to be named.
But US officials said flights over the northern zone were cancelled yesterday because of bad weather while flights in the south went ahead without incident.
Monday's clash near the town of Mosul was the first time US or British forces had fired in anger on Iraq since they ended four successive nights of air strikes on December 20th.
The new flare-up provoked sharp reactions from both Russia and China, and pushed crude oil prices on the London market up 40 cents a barrel.
A spokesman for the Chinese Foreign Ministry, Mr Zhu Bangzao, said Beijing was "deeply disturbed by the exchange of fire" and called for Iraq's territorial integrity to be respected.
In Moscow, the Russian foreign ministry expressed concern and called on both parties to "remain calm".
Official statements said Iraqi gunners opened fire after they were attacked first by the US aircraft, which they said riposted by flattening an anti-aircraft battery. They said a US plane was also shot down.
But a Pentagon spokesman said all US aircraft returned to base in Turkey after the clash, which he said erupted when Iraq fired three SA3 surface-to-air missiles at a patrol of three US F-15s and an F16 jet.
He said the US patrol responded by dropping 500 lb bombs on their attackers before loosing off three HARM anti-radar missiles.
President Clinton insisted US pilots were right to respond with force. "Because we effectively control the skies over much of Iraq, Saddam has been unable to use air power to repress his own people and to lash out again at his neighbours," he said.
But Iraq's Vice President, Mr Taha Yassin Ramadan, said yesterday that Iraqi jets are successfully defying the no-fly zones imposed by the Western Allies. "Iraqi planes are flying in these zones normally," he claimed.
Iraq's official press yesterday also railed against the lack of Arab support, criticising President Hosni Mubarak of Egypt and Saudi Arabia.
"No honest and reasonable person in Egypt, the Arab world and in the world can share the comments of Mr Mubarak, who has adopted the US policy of double standards," Iraq's Deputy Prime Minister, Mr Tariq Aziz, wrote in the daily al-Jumhuriya.
Mr Mubarak blamed the Iraqi government for the air strikes, while Saudi Arabia was instrumental in forcing the postponement of an Arab foreign ministers' meeting to discuss the crisis.
Despite the new tension the streets of Baghdad were calm yesterday. The Saheb Haddad cinema was showing a string of films documenting the US military disaster in Vietnam - Platoon, Good Morning Vietnam and Apocalypse Now.