Instead, Iraq's 250-member parliament unanimously voted in support of the order to cut cooperation with arms inspectors and monitors until the Security Council reviewed the lifting of sanctions and sacked Richard Butler, the chairman of U.N. Special Commission (UNSCOM), which is in charge of scrapping Iraq's chemical and biological weapons.
Iraq's Saturday announcement banned monitors to inspect sites already identified as having prohibited weapons, but allowed UNSCOM to maintain its monitoring cameras and electrical sensors.
President Clinton on Monday demanded that Iraq let U.N. arms inspectors "finish the job" they were sent to do and said that he would not rule out any options for action until they were allowed to resume work.
"Until the inspectors are back on the job, no options are off the table," Clinton said at a White House event.
However, a defiant Iraq on Sunday said it would not back down from its decision to ban the inspectors even if military action were threatened.
Vice President Taha Hussein Ramadan said on Sunday in a speech opening a trade fair that "there will be no cooperation [with the inspectors] before Iraq's demands are met." He said the country would maintain its stance "until the sanctions are lifted."
His comments came a day after the U.N. Security Council issued a statement condemning Iraq's decision Saturday to cut off all dealings with arms inspectors as "a flagrant violation" of U.N. resolutions and of an understanding between Iraq and U.N. Secretary-General Kofi Annan.
However, Iraq says its decision to end inspections is final this time, reports CBS News Correspondent Wyatt Andrews.
U.S. officials met at the White House to discuss the situation Sunday. Defense Secretary William Cohen, who cut short a trip to Asia, is hinting that military action is under discussion.
"We always have that capability," says Cohen. "We prefer to act through our allies and with our allies. Hopefully that will be the case if we have to take any action at all."
Clearly, Iraq has decided it has nothing to fear. After a similar inspection halt eight months ago, President Clinton threatened if the Iraqis ever curtailed inspections, "there will be serious consequences."
Since then, the Iraqis have suspended inspections twice. Chief U.N. inspector Butler fears the Iraqis can use the suspensions to hide weapons of mass destruction.
"What must be of concern now is that they are now making a move on our long-term monitoring," says Butler. "No one in the council wants that to happen. We must stay there to continue to monitor."
Iraq argues that seven years of inspections are enough, that sanctions have hurt the Iraqi peopleand that the U.N. and Butler have asked too much.
"He wants Iraq to comply but without any reward. That is not acceptable," says Iraq Deputy Prime Minister Tariq Aziz.
The administration is signaling it wants the U.N. to take the lead now, hoping that Iraq's so-called final decision on inspections will increase outrage. So far, the U.N. is demanding a return to inspections, but issuing no threat of any kind.
Baghdad is seeking the removal of sweeping international sanctions imposed on Iraq after its 1990 invasion of Kuwait. The United Nations has said sanctions will be removed only when Iraq's weapons of mass destruction have been dismantled.
The Baghdad government-controlled press welcomed the Iraqi decision, accusing Butler of being a "spy" who should be removed.
"We say to the Security Council that it should expel the spy Butler from the Special Commission and lift the unjust embargo on Iraq," said Babel newspaper, owned by President Saddam Hussein's eldest son, Uday.
©1998 CBS Worldwide Corp. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press and Reuters contributed to this report