Allies fear economic and political impact

Berlin declared yesterday that it would do its utmost to avert a war in Iraq, warning of a possible "explosion" of oil prices that could derail Germany's economic recovery.

Speaking before President George Bush delivered his blunt words at the General Assembly in New York, Hans Eichel, Finance Minister in the ruling Social Democrat-led coalition, said an escalation of the conflict could trigger a surge in oil prices that could "upset many plans". The German government would " try to prevent things getting that far", Mr Eichel told the Bundestag.

His remarks reflect the hostility of German public opinion to what Chancellor Gerhard Schröder calls an American "adventure" in Iraq – a hostility Mr Schröder is hoping to harness to help him win re-election this month.

A similar warning was voiced by Wim Duisenberg, head of the European Central Bank, who said the possible attack was exacerbating worries about economic growth.

Qatar and Turkey also expressed their opposition. The al-Udeid air base in Qatar is emerging as a likely regional command and control centre for the Americans.

Bulent Ecevit, the Turkish Prime Minister, said the threat of an attack was "a sword dangling over our heads". Mr Ecevit's co-operation could be vital to the Americans, but Turkey fears that if Saddam Hussein is unseated Iraq could fall apart, destabilising the entire region, including volatile Kurdish areas in south-eastern Turkey.