Clinton says Iraq must live up to its obligations to the United Nations  ALSO: U.S. was 'poised' to strike Iraq Caution, optimism mark world reaction to Iraq announcement Clinton's statement on Iraq

WASHINGTON (CNN) -- U.S. President Bill Clinton on Sunday said Iraq had "backed down" and accepted the unconditional return of U.N. weapons inspectors and their unfettered disarmament efforts.

Clinton, speaking at a White House news conference, warned Iraqi leader Saddam Hussein that Washington would remain "ready to act" militarily should Baghdad not abide by its renewed pledge to resume cooperation with U.N. inspectors.

"Iraq has backed down, but that is not enough. Now Iraq must live up to its obligations," Clinton said, listing four conditions that Baghdad must fulfill regarding weapons inspections. He said Iraq must:

• Unconditionally resume cooperation with inspectors.
• Give unfettered access to inspection sites.
• Turn over all relevant disarmament documents.
• Not interfere with U.N. weapons inspectors in any way.

The U.S. administration said its military buildup in the Gulf would continue, to make sure that Hussein was living up to its promise to end its October 31 ban on U.N. weapons inspections.

Pentagon officials told CNN that the U.S. military deployed in the Gulf remained ready to act at any time, should they be ordered to do so.

Clinton's statement echoed a stern warning by British Prime Minister Tony Blair in London earlier in the day. Britain has been Washington's closest ally in this latest Iraqi standoff.

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"This is not over until absolute and unconditional compliance is guaranteed and delivered. Until that, we remain on alert," Blair told reporters outside his Downing Street office.

He said Hussein would be given no future notice of plans by the West to launch attacks should U.N. inspectors return and again hit an impasse. "There will be no further warnings whatsoever," he said.

While the United States and Britain maintained the pressure on Iraq, the U.N. Security Council was expected to meet again Sunday to continue discussing Iraq's cooperation pledge and the latest developments.

No consensus was reached in a first round of intense debates on Saturday as to what exactly to make of the Iraqi position.

The Iraqi leadership sent three letters to the United Nations within 24 hours -- literally while U.S. forces were said to be about to launch an attack.

But those letters of compliance led to some confusion.

The initial Iraqi letter, addressed to U.N. Secretary-General Kofi Annan, said U.N. weapons inspectors could resume their work, but it also linked cooperation with "a further chance to achieve justice by lifting sanctions" imposed on Iraq after its 1990 invasion of Kuwait.

Later, Iraq submitted two additional letters, each of which apparently sought to convey that Hussein would allow U.N. weapons inspectors to resume "all their activities" under U.N. resolutions without condition.

U.S. National Security Adviser Sandy Berger said earlier that the initial Iraqi proposal had "more holes than Swiss cheese."

Security Council members were divided over Iraq's initial response: The Iraqi letter was welcomed by France, Russia and China as the council began meeting late Saturday. The United States was the only member to reject it outright and Britain said it was skeptical.

Iraq's representative to the United Nations, Nizar Hamdoon, on Sunday said he hoped the latest crisis was defused.

"My hope is that this crisis will be resolved peacefully and I think it's very important not only for Iraq, but probably for the rest of the region over there ... that this crisis be solved peacefully," he said.

White House Correspondents John King and Eileen O'Connor, Correspondents Christiane Amanpour, Richard Roth, Jamie McIntyre and Reuters contributed to this report.