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By Nadim Ladki

BAGHDAD, March 16 (Reuters) - Iraqi President Saddam Hussein said on Sunday Iraq was ready to fight the United States anywhere in the world if Washington launched a war.

"When the enemy opens the war on a large scale it should realise that the battle between us will be waged wherever there is sky, earth and water anywhere in the world," Saddam was quoted by state-run Iraqi media as telling a group of military officers.

Iraqi Foreign Minister Naji Sabri said Baghdad was ready for war within the hour and had trained tens of thousands of "martyrs" to fight Americans.

Baghdad's defiant messages were issued as U.S. President George W. Bush met close allies Britain and Spain and declared Monday a final day of diplomacy to resolve the Iraq crisis.

Iraqi television showed Saddam, in suit and tie, addressing ranks of uniformed officers who gave him a clenched-fist salute.

"Who appointed America the unjust judge of the world?" Saddam said.

"It is the right of every person to ask them: who appointed you a judge on us? I don't believe the world has seen this level of lying...as that coming out from America and Britain."

Saddam put Iraq on a war footing on Saturday, dividing the country into four military zones to prepare for any U.S.-led invasion.

He said Iraq would be victorious in any showdown with the United States "because simply they are on the side of falsehood and you are on the side of righteousness".

"MARTYRS READY"

"We are getting ready for war as if it will happen in an hour," Sabri told Dubai-based Al Arabiya television, adding that food rations had been distributed to last until late August.

"Tens of thousands of Iraqi men and women have volunteered to be martyrs in the battle with the American enemy and we have prepared them, he said. "We have prepared ourselves for all kinds of war, including street warfare and desert warfare."

The Arabic term for warriors ready to die for a cause has become associated with Palestinian suicide bombers. It was unclear to what sort of fighters Sabri was referring to, but he did later cite the Palestinians' conflict with Israel to argue that superiority in arms would not guarantee Washington victory.

Iraq's professional armed forces total some 390,000 but Sabri said: "Seven million Iraqi people have been trained in weaponry... All are working to preserve national honour."

Threats of guerrilla warfare against U.S. troops fit with Baghdad-based diplomats' views of Iraq's war strategy -- very different to the open desert battles of the 1991 Gulf War.

Diplomats said Saddam was likely to place mechanised divisions around major cities and have his Baath Party and other militias lead street fighting in urban areas, hoping to slow any U.S. advance and, by inflicting heavy casualties, force Washington to the negotiating table.

"They want a long war, with lots of body bags going back to Washington and London," one diplomat said.

"They feel the already strong anti-war sentiment in the West could grow rapidly if the war drags on and (there are) mounting casualties on two sides -- Iraqi civilians and foreign troops."

Diplomats said, however, Saddam's strategy would depend on popular support and queried whether Iraqis would have the stomach for long sieges, heavy street fighting and loss of life in the face of a massive, morale-sapping U.S. assault.

Some Western critics of U.S. policy on Iraq say an invasion could provoke September 11-style attacks.

The United States and Britain have massed a force of more than 250,000 troops in the Gulf region ready to attack Iraq. 

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