The 15-member European Union, seeking to ease its own internal divisions and calm transatlantic friction, struck accord on a text which sought to balance the pro-US sympathies of Britain with the firmly anti-war stance of Germany and France.
"Time is playing against Iraq," said Greek Prime Minister Costas Simitis, the current EU president.
But the EU could face fresh turmoil Tuesday after candidate states from the former Soviet bloc -- angry at not being invited to the summit --suffered a vicious tongue-lashing from French President Jacques Chirac over their support for Washington's push for war.
The would-be members are to be briefed on the agreement hammered out at Monday's summit, called at short notice amid a growing anti-war movement which saw millions of demonstrators out on the streets across the globe at the weekend.
After hearing from UN Secretary General Kofi Annan, the EU said it wanted to achieve Iraq's "full and effective" disarmament peacefully, but that the onus lay with Baghdad -- accused by the United States of possessing an arsenal of weapons of mass destruction.
"War is not inevitable. Force should be used only as a last resort," the final EU declaration said. "However, inspections cannot continue indefinitely in the absence of full Iraqi cooperation."
The EU summit came a day after a deal by NATO to settle a dispute on military preparations for a possible Iraq war which had escalated into one of the most damaging crises in the alliance's 54-year history.
The EU is facing difficulties forging a common foreign policy as it prepares to welcome 10 new members next year.
But highlighting the continuing splits, British Prime Minister Tony Blair -- Washington's staunchest ally on Iraq -- stressed that Saddam was facing a last chance to rid itself of its alleged stock of banned weapons.
"Iraq will be disarmed of weapons of mass destruction whether it is done peacefully or by conflict," he told reporters.
Almost simultaneously German Chancellor Gerhard Schroeder, who has sparked serious tension with Washington through his hardline opposition to war, underlined the peace-seeking aims of the bloc.
"The aim of the EU remains a peaceful solution of the crisis over Iraq," he said, adding that Germany had opposed the inclusion of the phase "the time is running out" in the final statement. "It is naturally a compromise."
UN chief Annan told the EU leaders that the focus must remain on disarming Iraq and warned against unilateral action outside the United Nations -- while warning that international discord would only weaken pressure on Iraq.
"We cannot afford to have such tensions or have them sustained over a long period of time," he said.
And with a new report on the work of UN weapons inspectors due around the end of the month, he said: "I urge the Iraqi leadership to choose compliance over conflict." The EU summit was the latest attempt to present a united front on the Iraq crisis.
A joint position hammered out at a foreign ministers' meeting on January 27 was shredded within days through rival stands taken by France and Germany on one side and five EU members including Britain, Italy and Spain on the other.
The image of European unity was further shattered when 10 former communist countries, seven of them EU candidate states, signed another letter backing the United States.
The missives infuriated Berlin and Paris and appeared to vindicate a jibe by US Defence Secretary Donald Rumsfeld that "old Europe" was being consigned to irrelevance.
And Chirac delivered a stinging rebuke to the candidate states on Monday, saying they "should have kept quiet."
Chirac singled out Romania and Bulgaria with a veiled threat to block their bids to join the EU in 2007.
"If they really want to diminish their chances to join the EU then they couldn't find a better way of doing it."
European Parliament President Pat Cox said he had called on EU leaders to "cool it" over Iraq, notably by seeking to voice a more coherent EU message over the crisis - Sapa-AFP
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