By Steve Schifferes BBC News Online in Washington

Security will be stepped up at airports

The US Government has raised the terror alert level to high or orange as fears grow of attacks on strategic installations.

Americans woke up from the news of the president's ultimatum to Iraq facing another worry - domestic terrorism at home.

The Department of Homeland Security announced that it was launching Operation Liberty Shield to enhance domestic security as the US moves towards war.

Homeland Security Secretary Tom Ridge said that "America was ready" and that state, local and federal officials were working together to secure US borders and protect vital facilities.

The department also said that it would hold in protective detention asylum seekers from Iraq and 33 other nations while it was determining whether their claims were justified.

But he told the public not to panic and to ignore rumours.

"There is bound to be disinformation. Don't react to rumours. We will strive to get the facts out there as fast as we can," he said.

In the previous alert, in mid-February, panic-buying of duct tape and plastic sheeting stripped hardware stories of supplies.

Lots of threats

Mr Ridge warned that al-Qaeda and its terrorist network had historically targeted a wide range of American facilities, both symbolic and economic.

And the deployments he has ordered reflected this.

Mr Ridge said that that he had spoken to the governors of all 50 states, asking them to deploy National Guard units to protect bridges and other strategic transportation targets.

Federal security at borders will be tightened with more ships escorted to ports.

There will be tightened security at transportation facilities like airports and trains, with flight restrictions over certain cities like New York.

Chemical plants, oil depots, and nuclear plants will be more tightly guarded.

And food security will be stepped up.

In New York, City "operation Atlas" has deployed armed police at key locations like the Stock Market and Pennsylvania Station.

And security has been tightened at the White House, with pedestrians now excluded from the two blocks on Pennsylvania Avenue in front of the building.

Tractor incident in Washington

But while security was being tightened nationwide, a bizarre incident in Washington showed that the capital itself was still vulnerable.

On Monday, a John Deere tractor driven by a disgruntled farmer drove through downtown Washington before crashing into the lake at Constitution Gardens, just blocks from the White House.

The man claimed to be carrying explosives, and for 24 hours armed police have surrounded the site, cordoning off several Federal buildings and paralysing traffic through much of downtown area.

Democrats target security

Meanwhile, many of the Democratic contenders for the presidency have called for more resources to fight terrorism at home.

In a speech on Tuesday, Democratic Senator John Kerry called for an extra $50bn over five years to pay for more police and firefighters for cash-strapped states and create a volunteer community defence force.

"America needs a new strategy for homeland security that asks Americans to do more," he said.

Like his rival, Senator John Edwards of North Carolina, Mr Kerry favours the creation of a new domestic intelligence unit that would take over many of the functions of the FBI.