TAJI, Iraq - Iraq showed reporters a warehouse stuffed with baby milk and sugar on Tuesday to repudiate a U.S. newspaper report that the building was being used to produce biological weapons.

Iraqi Trade Minister Mohammed Mehdi Saleh met international media at a warehouse in the Taji area northwest of Baghdad, which U.S. intelligence officials quoted in the Washington Times newspaper last week said was a biological weapons facility.

An iraqi woman arranges sugar sacks at a foodstuff warehouse of the Ministry of Trade in the Taji area, northwest of Baghdad, August 20, 2002. Iraq on Tuesday opened up the site for foreign journalists to refute U.S. threats it was producing weapons of mass destruction. REUTERS/Faleh Kheiber

But instead of weapons and sophisticated labs, reporters on Tuesday found baby milk and sugar which had been bought under Iraq's oil-for-food deal with the United Nations."They (Americans) are checking every movement in Iraq, but a satellite cannot tell real information," Saleh told reporters at the site. "This is rubbish information, actually rubbish information to convert baby milk and baby food and sugar to weapons of mass destruction."

President Bush has called Iraq "an enemy until proven otherwise," accusing Baghdad of developing weapons of mass destruction.

Official U.S. policy has been to seek a "regime change," widely interpreted to mean the United States would like to topple Iraqi President Saddam Hussein.

The Washington Times reported last week that a U.S. intelligence agency spy satellite had photographed a convoy of about 60 trucks at the building earlier in the month.

The Trade Ministry warehouse, which consists of three halls, on Tuesday contained boxes of powdered milk from Yemen, Vietnam, Tunisia and Indonesia and sacks of sugar imported from Egypt and India under the U.N. oil-for-food programme.

Iraq, which has the second largest oil reserves in the world behind Saudi Arabia, has labored under U.N. sanctions imposed after it invaded Kuwait in 1990. A U.S.-led coalition expelled Iraqi forces from Kuwait in the 1991 Gulf War.

"We started to move food from this warehouse to supply stores in provinces early this month, and more specifically on August 4 as we started to distribute food rations every two months," Saleh said.

"We have transported 2,500 tons of powdered milk in 187 trucks and not 60 trucks as the Americans said and we will continue (to do so)," he added.

"If they enlarge the satellite photographs they can compare boxes of the baby milk moved from this site as they were not covered and boxes here."

The warehouse, which was used to store meat before the 1991 Gulf War, was completely destroyed during the war. It was recently rebuilt by a French company.

Copyright 2002 Reuters Ltd

###