Iraq insisted the warheads had been included in its declaration. It was not immediately clear if discovery constituted a "material breach" of the U.N. resolution requiring Iraq to itemize all its weapons of mass destruction and their components.

White House spokesman Scott McClellan said the administration was "aware of the reports and we look forward to receiving information from the inspectors." McClellan would not comment on how significant the find was.

The 122 mm shells were found when inspectors searched bunkers built in the late 1990s at the Ukhaider Ammunition Storage Area, about 75 miles south of Baghdad, said Hiro Ueki, the spokesman for U.N. weapons inspectors in Baghdad, in a statement.

The team examined one of the warheads with X-ray equipment and took away samples for chemical testing, Ueki said.

While the artillery rockets are evidence of an Iraqi weapons program, they may not amount to a "smoking gun" unless some sort of chemical agent also is detected, said U.S. officials, speaking on condition of anonymity.

Key questions with the new find are whether any chemical weapons were ever loaded into these warheads, and, if so, when, officials said.

Serial numbers on the rockets should tell inspectors where and when they were made, one defense official said.

The United States, which has begun a heavy military buildup in the Persian Gulf, has threatened war on Iraq if it is found to be hiding banned weapons programs. The Iraqi government says it no longer has any chemical, biological or nuclear weapons and submitted a 12,000-page declaration to the United Nations last month that it said proved its case.

Ueki told The Associated Press that the shells were not accounted for in the report. "It was a discovery. They were not declared," he said.

But Lt. Gen. Hossam Mohammed Amin, the chief Iraqi liaison officer to the inspection teams, said they were short-range shells imported in 1988 and mentioned in Iraq's December declaration.

He expressed "astonishment" over "the fuss made about the discovery by a U.N. inspection team of 'mass destruction weapons.' It is no more than a storm in a teacup," Amin told a news conference hastily called after the U.N. announcement.

Amin said the inspection team found the munitions in a sealed box that had never been opened and was covered by dust and bird droppings.

"When these boxes were opened, they found 122 mm rockets with empty warheads. No chemical or biological warheads. Just empty rockets which are expired and imported in 1988," Amin said, adding similar rockets were found by U.N. inspectors in 1997.

Physicist David Albright, president of the Institute for Science and International Security and a former nuclear weapons inspector in Iraq, said that the discovery would represent a violation "if Iraq knew that these warheads existed and they are for chemical weapons."

Inspectors will "have to test to see if there are any traces of chemical weapons in the warheads and in the bunkers where they were found, and they will have to talk to the Iraqis," Albright said.

On Dec. 7, a chemical team secured a dozen artillery shells filled with mustard gas that had first been inventoried by earlier inspectors in the 1990s. Those were the first weapons of mass production brought under inspectors' control in the current search, which began in November.

Chief inspectors Hans Blix and Mohamed ElBaradei have said Iraq's weapons declaration is incomplete ­ failing in particular to support its claims to have destroyed missiles, warheads and chemical agents such as VX nerve gas.

Inspectors today also searched the homes of two Iraqi scientists in Baghdad, escorting one of them to a field to examine what appeared to be a man-made mound of earth. The scientist, who carried a box of documents as he left his house, was then taken to the inspectors' hotel along with the documents and Iraqi officials.

An Iraqi official said the inspectors also asked to interview two other scientists in private, but that the scientists refused to speak unless Iraqi liaison officials were present.

Blix and ElBaradei have stepped up demands that Iraq improve its cooperation ­ including allowing private interviews with scientists ­ and are headed to Baghdad to meet officials Sunday and Monday and seek more information.

"Iraq must do more than they have done so far," Blix said in Belgium after briefing European Union officials. Iraqis "need to be more active ... to convince the Security Council that they do not have weapons of mass destruction."

Otherwise, he said, the alternative is "the other avenue ... we have seen taking shape in the form of military action."

The homes searched today were those of physicist Faleh Hassan and his next-door neighbor, nuclear scientist Shaker el-Jibouri, in the neighborhood of al-Ghazalia.