The Western defense alliance, facing one of its gravest crises in its 54-year history, called off a meeting of ambassadors after it became clear they were no nearer to agreeing whether NATO should help Turkey with war preparations.

The missile report gave British Prime Minister Tony Blair fresh ammunition in the war of words among NATO allies and the five members of the U.N. Security Council that have the power to veto any new resolution authorizing military action in Iraq.

But he failed to sway France and Germany despite a tough letter warning them and other EU members the authority of the United Nations could be jeopardized if they rule out war.

A panel of independent arms experts told the U.N. the range of Iraq's Al Samoud 2 rockets exceeded by up to 24 miles the 93-mile limit laid down by U.N. arms controls.

"If these reports are correct ... it is very serious," Blair said after talks with Australian Prime Minister John Howard.

"It would be not just a failure to declare and disclose information, but a breach of Resolution 1441," Blair said, referring to the November Security Council resolution threatening "serious consequences" if Iraq failed to disarm.

A White House spokeswoman called the missile report "a serious and troubling" development.

Iraqi Deputy Prime Minister Tareq Aziz, arriving in Italy to lay out his case before Europe, countered: "We are still within (missile) limits that are decided by the United Nations."

He said later Iraq no longer had the means to attack Israel in reprisal for a U.S.-led assault, as it did in 1991.

Chief U.N. weapons inspectors Hans Blix and Mohamed ElBaradei report to the Security Council on Iraqi compliance on Friday. U.N. diplomats said Blix may not come to any more damning conclusions about Iraq than he did Jan. 27.

RUSSIAN VETO POSSIBLE

Russian President Vladimir Putin was quoted in the French press as saying Russia might block further U.N. steps against Iraq.

China has lined up with Russia and France to give the doves an apparent majority among the five Security Council veto powers over the United States and Britain, who say they want a further U.N. resolution, but will go to war without one if necessary.

Russian officials at the U.N. called the missile issue "a technical matter" rather than a serious violation of arms controls. Putin was quoted as saying Russia might use its veto but that it was too early to discuss the issue in detail.

German Foreign Minister Joschka Fischer said Germany -- one of the 10 other members of the Council without a veto -- did not think Iraq was in "material breach" of 1441.

German Chancellor Gerhard Schroeder said a majority of the Council's 15 members supported Germany's position.

"Together with France, Russia and other partners, the government is doing all it can for a peaceful resolution. That is possible and we are fighting for that," he told parliament.

British Foreign Secretary Jack Straw said Franco-German proposals for more weapons inspectors to be sent to Iraq instead of early military action would send a signal "defiance pays."

As Washington called up more military reservists, a White House spokesman said talks were under way on the language of a new U.N. disarmament resolution on Iraq.

Britain's Blair called for such a resolution in his letter to the EU ahead of Monday's emergency summit on Iraq, which sparked a new dispute when diplomats from some of the 10 future members complained of not being invited.

U.S. SPECIAL FORCES IN IRAQ

U.S. officials said small units of elite special forces were already inside Iraq, laying the foundation for any invasion.

U.S. intelligence has detected movement by the Iraqi military of large amounts of explosives into southern Iraq, perhaps to destroy oil wells in the event of attack, they said.

Both the United States and Britain, who argue Iraq has weapons of mass destruction which might fall into the hands of terrorist groups, were on alert for attacks at home.

British police arrested a Venezuelan man carrying a live hand grenade at the country's second-largest airport Gatwick, part of which was closed off. Troops patrolled Heathrow, London's main airport, and anti-aircraft missiles were deployed in Washington.

Washington seized on a taped message attributed to Saudi-born militant Osama bin Laden which talked of "our Mujahideen brothers" inside Iraq as evidence of an "unholy partnership" between his al Qaeda network and Iraq.

Defense Secretary Donald Rumsfeld told the Senate Armed Services Committee the United States did not generally rule out using nuclear weapons, but said he was confident they would not be needed in a conflict with Iraq.

Within NATO, France, Germany and Belgium have blocked the planning process to help protect Turkey in the event of a war against Iraq, calling it a premature preparation.

German Defense Minister Peter Struck said Thursday however the deadlock would be broken by Saturday.

U.N. Secretary-General Kofi Annan has accepted in principle an invitation to address an emergency summit Monday of the EU, deeply divided on the crisis. Annan has warned against military action being taken against Iraq without U.N. approval.

Divisions did not extend to all areas. France backed the United States when a U.S. official said it was "unacceptable" for Iraq to take its turn next month as president of the United Nations Conference on Disarmament.