EKINNEH AGBAW-EBAI  [//20]

The statement presents a potential problem for the US which has been preparing for war.

The head of the UN nuclear watchdog agency, whose agents have been combing Iraq for two months, searching weapons of mass destruction has said it was still too early to determine whether Baghdad was trying to develop nuclear weapons. The head of the International Atomic Energy Agency (IAEA), Mohamed ElBaradei says weapons inspectors in Iraq have found nothing suspicious so far, adding there was no evidence that Iraq had lied in its declarations on nuclear arms. He spoke at the end of a top-level IAEA meeting which censured North Korea for reactivating suspect nuclear programs and eliminating agency controls meant to ensure it is not making atomic weapons.

Earlier, weapons inspectors rejected an accusation by Iraqi President Saddam Hussein that they were working as spies. US President George Bush also dismissed the claims and said the Iraqi leader's actions had been "discouraging". Last month Iraq presented a 12,000-page report on its weapons programmes. Some countries, including Britain and the US accused Baghdad of lying in that report. Speaking at the IAEA's headquarters in Vienna, Mr ElBaradei said the agency's inspectors on the ground did not have a "smoking gun". IAEA experts are in Iraq to check for any signs of a prohibited atomic weapons programme. Other inspectors from the UN Monitoring, Inspection and Verification Commission (UNMOVIC), are looking for biological or chemical weapons. Mr ElBaradei and UNMOVIC chief Hans Blix are expected to give the UN Security Council a full report on Iraq's compliance with disarmament resolutions on January 27.

The BBC said the UN statement presented a potential problem for the Bush administration, which has been preparing for war. Though President Bush has always insisted that it is up to Iraq to prove that it is telling the truth - and not for the UN to show it is lying - the absence of a "smoking gun" will make it harder to convince critics at home and abroad that the use of force is necessary. On Monday, Saddam Hussein accused the weapons inspectors of spying and engaging in " pure intelligence work"; a claim denied by both the UN and the US. BBC online quoted White House spokesman Ari Fleisher blaming Iraq for spying. He accused the Iraqis of bugging the inspectors' hotel room and tapping their phone calls. Inspections have continued and Iraq said last week that the UN teams had visited 230 sites and had found no evidence of nuclear, chemical or biological weapons. Meanwhile, Jordan and Turkey have warned against the consequences of a possible war on Iraq. Meeting in the Jordanian capital, Amman, Turkish Prime Minister Abdullah Gul and King Abdullah of Jordan said a US-led attack would have negative effects.