BAGHDAD, Iraq -- Iraq reveled Thursday in the diplomatic turmoil surrounding U.S.-led war plans and rejected British Prime Minister Tony Blair's effort to find a compromise over an ultimatum for Saddam Hussein.
Blair's compromise would abandon a proposed Monday deadline for Iraq to fully disarm or face war, instead giving Saddam a six-point to-do list of disarmament tasks to avoid "serious consequences."
Iraqi Foreign Minister Naji Sabri said it amounted to the same thing.
"It is an attempt to beautify a rejected aggressive project," he told journalists. "(Britain) is trying to polish this project, which has been rejected by the majority of Security Council members."
Asked whether Iraq opposed the British list, he said: "Of course. We reject any project contrary to resolutions already adopted by the Security Council."
"The United States, with its policy of aggression, wants international cover for this aggression," he added. "I don't think the United States will succeed."
France, which had threatened to veto the Monday deadline, also rejected the British compromise because the list of disarmament requirements presumably would come with a short deadline.
Germany, a non-permanent Security Council member without veto power, said the plan was unlikely to yield a compromise because it still "basically gives an authorization for war."
The Bush administration insisted it was optimistic that it could pass an ultimatum this week, but that appeared increasingly unlikely.
Iraqi newspapers gloated over the turmoil.
"It is obvious that Bush and Blair have lost the round before it starts, while we, along with well-intentioned powers in the world, have won it," the popular daily Babil, owned Saddam's son Odai, said in a front-page editorial.
"Blair's future is at stake now, and his downfall will be a harsh lesson in Britain's political history," it said.
Sabri said a high-level Arab peace mission that was scheduled to travel to Baghdad this week would not come, although he said Iraq had not rejected the visit.
"We did not refuse to receive the Arab committee," Sabri said. "They are coming not for tourism. They are coming for work, and this requires measures."
"We are trying to agree on a time appropriate for both sides," he added.
The Arab delegation had been scheduled to meet in Bahrain on Thursday with the Bahraini king, Sheik Hamad bin Isa Al Khalifa, and then travel Friday to the Iraqi capital. The Arab League decided to send the delegation to ask Saddam to cooperate further with inspectors to prevent a war.
In a statement, the league called the postponement "negative" and "ill-timed," saying it "censored Arab efforts ... for finding a way to avert the war and destruction."
The United States pushed forward with war preparations, moving troops into place just south of Iraq. The U.N. mission that patrols the Iraq-Kuwait border said it would withdraw some of its observers to its headquarters in Kuwait.
Iraq prepared as well, lining the streets of Baghdad with fighting positions and foxholes.
Iraqis are "fully ready ... to confront and bury the aggressors," Sabri told the Arab television network Al-Jazeera. "We will turn the land of Iraq into an American graveyard. We will chop off the heads of anyone who tries to violate Iraqi territory."
At a military compound east of Baghdad, several dozen men from other Arab nations trained alongside Iraqi special forces. The men claimed Wednesday that thousands of men were in such camps across Iraq.
"We came to fight alongside our Iraqi brothers against the Americans and the Zionists (Israelis)," said a man from Syria who, like most others, refused to give his name.
"Today they attack Iraq. Tomorrow it will be Syria and the rest of the Arab nation," he said. "God willing, the soil of Iraq will be their graveyards."
The fighters lumbered through calisthenics and a simulated battle for the benefit of journalists. They demonstrated their weapons techniques after kneeling in prayer.
U.N. weapons inspectors returned Thursday to a military compound where Iraqis have been crushing Al Samoud 2 missiles, banned because they may fly farther than the 93 miles allowed by the United Nations.
Since March 1, Iraq has eliminated 58 of the missiles, from an arsenal of about 100. It also has destroyed 28 warheads, two casting chambers, two launchers and five engines associated with the Al Samoud 2 program.
Inspectors on Thursday also visited two rocket factories, a dumpsite for biological weapons and an ice cream plant, Iraq's Information Ministry said.
Inspectors said they interviewed an Iraqi involved in the unilateral destruction of chemical precursors on Wednesday. It was the 10th private interview since Iraq began pressuring scientists to grant them on Feb. 28. In the same period, five scientists have refused to grant interviews.
In another development, Iraq's Foreign Ministry announced a prisoner exchange deal with Iran. The ministry said Iran has agreed to release all prisoners from the 1980-88 Iran-Iraq war and Iraq will release all Iranians in its jails.
Iraq does not acknowledge holding Iranian prisoners of war, but said it would release Iranian common criminals.
About 1 million people were killed or wounded in the war, and although the neighboring countries have exchanged thousands of prisoners and remains of dead soldiers, considerable enmity remains. Each country accuses the other of harboring rebels opposed to its government.