Germany and France remain on a collision course with the United States and key European allies over Iraq in a high stakes stand-off which could weaken the United Nations, NATO, the European Union and transatlantic ties.

French President Jacques Chirac and German Chancellor Gerhard Schroeder underlined their rejectionist stance to Washington again Monday by announcing a new plan to disarm Iraq using beefed up peaceful means - but with no deadline.

"War is always the worst of all solutions," declared Chirac.

The leaders, meeting at a Berlin restaurant appropriately named "Zur letzen Instanz" (the last appeal), made the proposal in reply to a new draft U.N. Security Council resolution on Iraq by the United States, Britain and Spain.

Both Chirac and Schroeder said they opposed the draft but the French leader waffled when asked if he would veto it and deflected the question as "hypothetical." France, as one of the five permanent Security Council members, can torpedo any Council resolution with a "no" vote.

But even if the draft is vetoed the U.S. appears to be marching toward a military showdown with Iraq which could shove the United Nations to the sidelines with incalculable costs to U.N.

credibility.

"We are on the verge of war," declared U.S. President George W.

Bush's spokesman Ari Fleischer.

Germany and France are the leading European opponents of an Iraq war and their new thrust will likely further deepen the rift with the United States.

Jibes which have ratcheted up the Iraq debate continued with Schroeder implying the U.S. was quick to seek a military option because it had no idea of war's consequences.

"Maybe what makes good old Europe different from others is because it has been driven ... deep into the collective consciousness of the European people what war really means," said Schroeder.

The remark was a clear reply to U.S. Secretary of Defence Donald Rumsfeld, who criticized Germany and France as "old Europe".

Schroeder's ties with Washington have been badly damaged owing to Iraq war opposition which he made a key element of his reelection campaign last year. The big bust-up came after a German cabinet minister - who later resigned - compared Bush with Adolf Hitler. U.S. officials declared ties with Germany were "poisoned." There appears no chance of repairing relations between Schroeder and Bush.

"Schroeder will never enter the White House again," a senior U.S. official was quoted as saying at the Munich Security Conference earlier this month.

The war of words makes it very tough for either side to climb down without losing face in the current crisis.

As U.S. Senator Joseph Lieberman warned in a speech at the Munich conference: "Leaders on both sides have always in the past worked to douse the rhetorical flames, not fan them ... Now, more than ever, words have consequences."
Chirac last week infuriated east European countries by warning their membership in the European Union (E.U.) could be blocked if they backed the U.S. over Iraq. This gaffe came amid anger by some present E.U. members over the Franco-German claim to speak for the entire 15-nation bloc.

E.U. members Britain, Spain and Italy are backing the United States over Iraq. A total of 18 European nations signed two separate declarations of support for Washington in a move which outraged Berlin and Paris.

These divisions mean grand talk of a common E.U. foreign and security policy has been hit by probably its worst setback since the bloc was founded in 1957.

France and Germany's bid to stall military action contrasts with the draft by the U.S., Britain and Spain, which while not authorizing military force, would declare Iraq in violation of current U.N. Security Council Resolution 1441 which warns of "serious consequences" if Iraq fails to disarm.

Bush's drive toward war with Baghdad has also dragged NATO into one of its worst crises since the 19-member alliance was founded in 1949.

In an unprecedented move, France, Germany and Belgium blocked a request by NATO member Turkey for military aid earlier this month despite the fact that Ankara is the only Alliance member to share a border with Iraq.

To bypass France, the U.S. got the issue handled by NATO's Defence Planning Committee, of which France is not a member given that Paris withdrew from NATO's military wing in 1966.

Germany and Belgium quietly dropped opposition but the scars remain. U.S. officials reportedly plan to freeze Paris out of decision-making by relying on the Defence Planning Committee for all future important business.

"It's obviously not good news. If we fail to reform the entire Alliance is off," said Christopher Coker, a security affairs expert at the London School of Economics, adding that the idea the E.U.

could pick up the military slack was not credible given Europe's refusal to boost defence spending.

Coker predicted the Iraq crisis would lead the U.S. to asset-strip NATO and in the future simply use elements or members that suited its purposes.

Thus, Iraq may be the immediate issue but the starkly different positions staked out by the United States on one side and Germany and France on the other mean the conflict will reverberate long after Baghdad has been disarmed.

Four post-World War II pillars have been impacted by the crisis: the U.N., the E.U., NATO and transatlantic ties. The extent of damage to these institutions can only be calculated in the coming years - Sapa-dpa.