By Bridget Kendall BBC diplomatic correspondent

It is months since President George W Bush first singled out Iraq in his famous "axis of evil" speech, warning that America's foes were not just terrorists, but an enemy capable of wielding weapons of mass destruction.

Since then his vice-president has toured the Arab world to sell the idea of an attack on Iraq - and been rebuffed - the conflict between Israel and the Palestinians has become a full blown crisis, and anxieties among America's allies have multiplied.

King Abdullah of Jordan's comment that a war on Iraq could open a "Pandora's box" of problems is the latest in a long line of warnings.

Nonetheless, there is good reason to believe US preparations for some sort of military action have moved one step closer.

Preparing the ground

All along, administration officials and sympathetic allies like UK Prime Minister Tony Blair have insisted an attack is only one option.

Americans may be wary of a war that would wreak fresh havoc on the markets

Far preferable would be to get Iraqi leader Saddam Hussein to invite United Nations weapons inspectors back in, so they could check and eliminate weapons stocks banned under various UN resolutions.

But UN Secretary General Kofi Annan's most recent meeting with Iraqi officials did not go well.

Nor did a follow up meeting in Europe.

And so it seems we have now entered stage two: the beginning of the period of private and public consultation in which President Bush will consider options of how to strike, and start preparing American and international public opinion.

The British Government even says it has a dossier of evidence to help sway public sympathies.

Even better if the rhetoric convinces Saddam Hussein that the threat of military action is serious.

After all, if he can be persuaded his days are numbered, he might still change his mind and at the eleventh hour let UN inspectors back in again.

Saddam scenarios

So what are the options the US administration is looking at?

It is wholly unclear who would replace Saddam if he were toppled

Various scenarios are being hinted at.

At one end is a massive invasion on a Gulf War scale, perhaps an attack on three sides involving hundreds of thousands of troops.

This carries the risk of considerable casualties and the danger of further destabilising a region which is already a powder keg.

A further problem is what comes after Saddam Hussein.

Attempts to rally exiled groups into a coherent opposition have so far been unsuccessful.

So at the other end of the spectrum is a more modest intervention - perhaps an extended version of the air strikes that currently accompany the US and British policing of the no-fly zone, but with greater use of special forces to target suspected weapons depots and military installations.

At the very least, this way Saddam Hussein would be denied access to his biological and chemical weapons programmes.

More recently a third option has been aired.

Dubbed the "inside-out" approach by the US media, it would involve a limited strike to attack and isolate Baghdad and perhaps other key military centres, so that Saddam Hussein would literally be boxed in.

And - goes the plan - once denied the means to wield power, his regime would collapse, imploding internally.

US wariness

How soon might any of this happen?

Of course to impress Saddam Hussein, the threat must sound urgent.

But preparing international opinion needs patience.

Many coalition partners in Europe and the Middle East are still openly hostile.

Most important of all, the American people may not be ready.

Preoccupied by financial scandals that have wiped out part of their personal pensions, few will welcome a new war that might cause further turmoil on the markets.

With mid-term elections to decide who controls Congress due in November, it would be a foolhardy American president to rush into a war for which there is, as yet, no exit strategy.