Russia still hoping for a diplomatic solution

Russian reaction: Russia yesterday refused to accept the demise of its diplomatic drive to stop war in Iraq, as Foreign Minister…

Russian reaction: Russia yesterday refused to accept the demise of its diplomatic drive to stop war in Iraq, as Foreign Minister Mr Igor Ivanov flew to New York for a United Nations session today, warning Washington that it risked losing the "war on terror" by going into battle against Baghdad, writes Daniel McLaughlin, in Moscow

Mr Ivanov also insisted that the United States respect Russia's major oil interests in Iraq, while a conciliatory President Vladimir Putin told President Bush that disagreement over the arms impasse should not ruin US-Russian relations.

"Unfortunately today, in connection with the looming threat of war against Iraq, the unity of the international anti-terrorist coalition is under threat," a downbeat Mr Ivanov said, before leaving Moscow.

Mr Ivanov insisted he had not completely given up on a diplomatic solution to the crisis.

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"There are probably always grounds to hope that there is still a chance," Mr Ivanov said, adding that, even if war did begin, the UN should not be sidelined.

"We would like to hope that if the United States starts a war against Iraq, the issue will return to the UN Security Council in the near future," Mr Ivanov said.

"In other words, we should bring this situation into the legal framework because only the Security Council has the right to settle such situations."

Moscow's top diplomat also warned the United States that any post-war Iraqi regime must honour Russian companies' potentially lucrative deals to exploit Iraq's oil reserves - the second-largest in the world.

"Russia's oil contracts were developed on a clear legal basis. They are completely legitimate in nature and therefore we expect them to be fulfilled."

Following a pattern now familiar from months of diplomatic wrangling over Iraq, Mr Ivanov's tough tone contrasted with the soothing note struck by President Putin in a telephone conversation with his US counterpart.

"Mr Putin expressed regret regarding Washington's decision on an ultimatum and also in connection with the failure of diplomatic efforts to achieve a mutually acceptable compromise," a Kremlin statement said.

"Both parties emphasised that, despite differences in approaches and assessments, bilateral ties in critical situations similar to the current one are of special importance."

Apparently piqued at being ignored by Washington over Iraq, the usually compliant lower house of parliament yesterday postponed ratification of a Kremlin-backed, US-Russia treaty that would slash the nuclear arsenals of the old Cold War foes.