Speaking on the anniversary of the end of the 1980-88 Iraq-Iran war, Saddam made no direct mention of the US-British demand for the return of UN arms inspectors to Iraq.
But his speech comes as US officials consider a possible attack on Iraq to oust him for allegedly building weapons of mass destruction.
The Iraqi leader did not mention America and Britain by name, but referred to them as the "forces of evil" a phrase the Baghdad government frequently uses after US and British air-strikes in the no-fly zones over northern and southern Iraq.
"The forces of evil will carry their coffins on their backs to die in disgraceful failure," he said in the televised speech.
The US has warned Iraq of unspecified consequences if it does not allow UN weapons inspections to resume. Iraqi diplomats have held three meetings with UN Secretary-General Kofi Annan this year to discuss the issue and related topics.
US Vice President Dick Cheney on Wednesday said some US officials believe Iraq could acquire nuclear weapons in the future. He also expressed skepticism that the return of UN inspectors, barred by Iraq since 1998, would solve the problem.
Eventually, Cheney said, the international community will have to "figure out how we're going to deal with this growing threat to peace and stability in the region and obviously potentially to the United States".
Saddam, dressed in a dark suit behind a desk spread with white lilies, called on the UN to "honour its obligations" over sanctions imposed on Iraq after its 1990 invasion of Kuwait.
"The right way is that the Security Council should reply to the questions raised by Iraq and should honour its obligations under its own resolutions."
He was referring to 19 questions given to Annan at a meeting in March, and to council resolutions which say that UN sanctions on Iraq can be lifted once it has eliminated its weapons of mass destruction and fulfilled other requirements. Iraq has long said it has fulfilled these conditions and that the sanctions should be lifted.
Annan circulated the 19 questions, which deal with various Iraqi complaints, to the Security Council members, who have not replied.
About 15,000 members of the "Jerusalem Army" marched through Baghdad shortly before Saddam's 22-minute address was broadcast. Dressed in khaki uniforms and carrying rifles, the marchers held up placards that said, "Long live Saddam!" and "Down with USA!" Others carried photographs of Saddam or Palestinian and Iraqi flags.
"We reject the US war threats and we are ready to face them," said Sabah Mohammed, a 45-year-old woman taking part in the march.
The government has organised similar demonstrations for the last week. The Jerusalem Army is a civilian force established by Saddam in 2000 to drive the Israelis out of Jerusalem and support the Palestinian uprising.
While members of the Bush administration and Congress have spoken openly about war with Iraq, it's not clear that a military effort to topple Saddam would have international support particularly if Baghdad allows UN inspectors to return.
Saudi Foreign Minister Prince Saud on Wednesday said his government is opposed to a US strike on Iraq, and would not allow its soil to be used as a base for such a military action.
German Chancellor Gerhard Schroeder has warned a US attack on Iraq could wreck the international coalition against terrorism and throw the Middle East into turmoil.
Even British Prime Minister Tony Blair, considered Washington's strongest ally, faces opposition to war at home.