There are no current links between the Iraqi regime and the al-Qaeda network, according to an official British intelligence report seen by BBC News.

The classified document, written by defense intelligence staff three weeks ago, says there has been contact between the two in the past.

But it assessed that any fledgling relationship foundered due to mistrust and incompatible ideologies.

That conclusion flatly contradicts one of the main charges laid against Iraqi leader Saddam Hussein by the United States and Britain - that he has cultivated contacts with the group blamed for the 11 September attacks.

The report emerges even as Washington was calling Saddam a liar for denying, in a television interview with former Labour MP and minister Tony Benn, that he had any links to al-Qaeda.

Peace prospects

It also comes on the day US Secretary of State Colin Powell goes to the United Nations Security Council to make the case that Iraq has failed to live up to the demands of the world community.

Foreign Secretary Jack Straw is also ratcheting up the rhetoric in the ongoing crisis over Saddam's alleged weapons of mass destruction, saying the prospect of a peaceful outcome was "diminishing" by the day.

He said he could not believe the Iraqi regime would be "this stupid" not to disarm.

The defense intelligence staff document, seen by BBC defense correspondent Andrew Gilligan, is classified Top Secret and was sent to UK Prime Minister Tony Blair and other senior members of the government.

It says al-Qaeda leader Osama Bin Laden views Iraq's ruling Ba'ath party as running contrary to his religion, calling it an "apostate regime".

"His aims are in ideological conflict with present day Iraq," it says.

Gilligan says that in recent days intelligence sources have told the BBC there is growing disquiet at the way their work is being politicized to support the case for war on Iraq.

He said: "This almost unprecedented leak may be a shot across the politicians' bows."

Iraqi co-operation

Mr Straw insisted that intelligence had shown that the Iraqi regime appeared to be allowing a permissive environment "in which al-Qaeda is able to operate".

"Certainly we have some evidence of links between al-Qaeda and various people in Iraq," he told BBC Radio 4's Today program.

But he conceded: "What we don't know, and the prime minister and I have made it very clear, is the extent of those links.

"What we also know, however, is that the Iraqi regime have been up to their necks in the pursuit of terrorism generally."

He added: "The use of force to enforce the will of the UN, now, I'm afraid, is more probable, but it is not inevitable and the choice essentially is one for Saddam Hussein and his regime."

French President Jacques Chirac, as he met Mr Blair on Tuesday, called for UN weapons inspectors to be given more time, saying "there is still much to be done in the way of disarmament by peaceful means".

But Mr Straw said "endless" calls for more time were "futile" and risked being a "cop-out".

Both the US and UK are pushing for a second UN Security Council resolution soon, which could authorize force against Iraq.

Colin Powell has said the dossier of evidence against Iraq he is presenting to the Security Council will be "a straightforward, sober and compelling demonstration" that Baghdad is deceiving UN weapons inspectors and failing to disarm.

TV interview

Saddam Hussein himself denied on Tuesday having any weapons of mass destruction.

He told Mr Benn in the interview broadcast by Channel 4 News: "These weapons do not come in small pills that you can hide in your pocket.

"These are weapons of mass destruction and it is easy to work out if Iraq has them or not."

Denying any connection with al-Qaeda, he said: "If we had a relationship with al-Qaeda and we believed in that relationship, we wouldn't be ashamed to admit it."

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