The International Institute for Strategic Studies (IISS) warns that from a US perspective "Iraq presents the threat of a revanchist dictator in possession of nuclear, chemcial and biological weapons, and the means to deliver them.

"If Iraq's nuclear weapons development programme is not blocked, reasons Washington, it will be all the more difficult to constrain Iranian nuclear ambitions," says the IISS strategic survey for 2002.

"And if these are unchecked, then at some point Saudi Arabia and possibly the United Arab Emirates (UAE) will acquire a nuclear capability from a third country," it warns.

Although ties between Riyadh and Tehran have warmed in the last two years, the UAE is embroiled in a dispute over Iran's occupation of three potentially oil and gas-rich Gulf islands.

"There is no guarantee that a nuclearised Persian Gulf will be stable in a crisis, the London-based IISS notes.

"Stopping Persian Gulf nuclear proliferation by preventing Iraq from gaining weapons of mass destruction (WMD) and especially a nuclear capability, therefore, is a strategic imperative for the United States.

US President George Bush has repeatedly vowed to seek to oust the regime of President Saddam Hussein and threatened military strikes if UN weapons inspectors are not allowed to return to Iraq.

The study says Iraq continues to pose "a clear threat to its Arab neighbours as well as to the US and its allies," 12 years after it invaded Kuwait, sparking the 1991 Gulf war.

However it details the difficulties Washington faces trying to change the regime and the resentment caused by the harsh UN sanctions which have impoverished ordinary Iraqis.

"With respect to Iraq ... the battle for hearts and minds in the wider Arab world probably cannot be won," the IISS cautions.

"As long as Washington is committed to its current Iraq policy (of containment), American forces will have to remain in Saudi Arabia, aggravating a delicate political situation there and fuelling resentment over what (Osama) bin Laden calls military occupation and the alleged desecration of the land."

"Better in the administration's evolving view, to destroy the Saddam regime and accept the near-term political risk in order to seize the long-run benefits of an end to the confrontation."

The IISS underlines that the number of US troops in Kuwait has doubled to 10,500 since the September 11 attacks on the United States blamed on bin Laden.

It also notes "indications that American computer and communications equipment was being moved from Saudi Arabia to Qatar. This suggested that US Central Command was contemplating military action against Iraq even without Saud support."

Building a consensus within the US administration "on this audacious strategy, however, is proving difficult due to aversion to near-term risk."

The study also envisages the "possibility that he (Saddam) will decide to fulfil his disarmament obligations on pain of being ousted by the US or worse."

If Iraq submits to full inspection, IISS says a US attack could become "politically infeasible."

"The better option would then be to go ahead with inspections. Although they would not guarantee that Saddam would stop reconstituting WMD, the US would retain the option to use force."

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