By Caroline Hawley BBC correspondent in Amman

From the coffee shops of downtown Amman to the capital's smart government offices, from the men playing backgammon to the ministers, there is one main thing on the minds and lips of Jordanians - the looming threat of a war on neighbouring Iraq.

"It's all we talked about over Christmas," said a Jordanian Christian and mother of two.

A war against Iraq is a war against all Arabs and against the future of our region Rajai Nafa'a, Jordanian National Committee for the Defence of Iraq

"It'll affect us all here in different ways."

The main casualty would be the Jordanian economy.

Iraq is Jordan's biggest trading partner and its only supplier of oil.

In return for foodstuffs, medicines, and clothes, Jordan receives Iraqi oil at extremely favourable prices.

"Jordanian industries and trade and transport are all highly dependent on opportunities in Iraq," Jordan's Planning Minister, Bassem Awadallah, told the BBC.

"Tourism and investment levels in general would also be affected. The direct and indirect impact on the well-being of the Kingdom is of extreme concern."

Economic cost

Jordan, where it is estimated that 40% of the population live in poverty, has been already been discussing with the United States compensation for any economic damage.

A war could trigger a flood of refugees into Jordan

But the costs of any conflict would not only be financial.

Another major worry for Amman is that it might come under pressure to accept refugees fleeing Iraq.

The majority of Jordan's population is of Palestinian origin, descendants of those who fled successive Middle East wars in 1947 and 1967.

Terrified of a new influx of refugees, Amman has made clear it will close its border with Iraq as soon as conflict breaks out.

"We will simply not accept refugees in Jordan," says Mr Awadallah, explaining that Jordan would help the United Nations refugee agency (UNHCR) to care for any refugees on the Iraqi side of the border.

"We hope and pray and we are working to try to avert a strike - and the humanitarian disaster that would ensue."

Internal strife

Jordan, a close ally of Washington, also fears the political impact of an American-led war that would be deeply unpopular with its own people, already exercised by events in the West Bank and Gaza.

Jordanians overwhelmingly oppose a war with Iraq

The government is currently engaged in a nationwide campaign to rally and unite its people - a battle for Jordanian hearts at a time of great uncertainty for this small and vulnerable kingdom with troubled neighbours.

Across the country, giant billboards show five hands holding the Jordanian flag beneath the words: "Jordan First".

But Jordanians cannot help being pre-occupied with the prospect of a new war against Iraq - whose impact would almost certainly spill across its borders.

"It'll be a big problem for us," says the owner of a small office in Abdali Square that runs shared taxis between Amman and Beirut, Baghdad, Damascus and the Gulf.

"Everyone will just sit at home, no-one will spend, no-one will travel."

US opposed

And, whatever they think of Saddam Hussein, most Jordanians see no justification for a crisis which many believe the United States has manufactured in order to lay its hands on Iraqi oil and to redraw the political map of the region in its own interests.

"A war against Iraq is a war against all Arabs and against the future of our region," says Rajai Nafa'a, a member of the Jordanian National Committee for the Defence of Iraq, which is trying to enlist volunteers to act as human shields in Iraq if war does break out.

"We don't want anyone - and especially the Americans - to come to our area and settle here and teach us democracy and control our oil," he adds.

"This is our business."