With Al Qaeda terrorist network leader Usama bin Laden and his sidekick Mullah Omar in hiding, U.S. officials are turning their eyes to the next possible target: Iraqi leader Saddam Hussein.

Though President Bush hasn't yet given the go-ahead for a military hit on his father's old foe, the U.S. government is said to be gearing up to take out the Iraqi dictator in the next battle in the war on terror.

"President Saddam Hussein needs to understand I am serious about defending our country," Bush said Wednesday — and that could include a military strike on Iraq.

But as Bush keeps his options for dealing with Saddam close to his vest, administration officials are looking at gearing up for the next battlefront.

"This is not an argument about whether to get rid of Saddam Hussein. That debate is over. This is ... how you do it," a senior administration official who requested anonymity told the Knight Ridder news service Thursday.

Another senior U.S. official said that Bush's top advisers and agencies of the government are developing and refining a full range of options. The recommendations will then be circulated among top officials in the government and sent to the White House for a final decision.

After meeting at the White House Wednesday with Pakistani President Pervez Musharraf, who has been instrumental in aiding the U.S.-led war in Afghanistan, Bush said it really isn't his choice at all.

Bush said that any alliance between terrorist organizations and terror-supporting nations pursuing nuclear or other destructive weapons would be "devastating for those of us who fight for freedom," and added, "We, the free world, must make it clear to these nations they have a choice to make. I will keep all options available if they don't make the choice."

Using a three-pronged attack of military, diplomatic and covert actions, the idea is to topple Saddam and to render harmless the nuclear, chemical and biological-weapons programs that Bush has decided have become too dangerous to be allowed to continue. The CIA and the Pentagon are already drawing up plans. One CIA scheme includes plenty of spy games, information warfare, sabotage and tighter enforcement of the no-fly zones in the northern and southern parts of the country, the senior officials said.

CIA Director George Tenet is said to favor a plan that relies primarily on covert action rather than an outright military campaign, though the Central Intelligence Agency already is authorized to try to destabilize the Baghdad government.

During his State of the Union address last month, Bush plainly called Iraq one of the three points in the "axis of evil" that threatens world security. On Tuesday, Secretary of State Colin Powell told a Senate panel that getting rid of Saddam is a much higher priority for the administration than dealing with Iran and North Korea, the other two countries Bush named.

Powell qualified his comments on Iraq, though, and said it would be preferable if Saddam were brought down politically or diplomatically, and no battle plans against Iraq were currently in the works.

"The president is not asking for a war budget," Powell told the Senate Budget Committee.

Deputy Defense Secretary Paul Wolfowitz told the same committee Wednesday that too much "loose talk" is shaking up what is currently merely an opportunity to debate, but that administration officials are looking at the situation with wider eyes.

"I think we would all agree that countries that are hostile to us and are developing weapons capable of killing hundreds of thousands of people are a serious problem," he said. "It seemed a bit theoretical before Sept. 11. It's not theoretical at all anymore."

While Iraqi opposition leaders are joining in the huddle with Pentagon, White House, CIA and State Department officials, Vice President Cheney is expected to seek diplomatic backing from Iraq's neighbors during an 11-nation tour of the Gulf region next month.

But a campaign against Iraq would not be taken lightly by other nations. Russia and nearly all of Europe have been cool on the idea, saying they're disturbed by a spread of the war on terror. And a war with Baghdad could completely unravel the delicate diplomacy the U.S. has fostered in the Middle East, where Muslim allies like Jordan have much to lose if Iraq is thrown into chaos.

Washington also may lose the use of Saudi Arabian bases and could feed anti-American sentiment as it moves into the region. Nevertheless, the Bush administration is determined to oust Saddam, even if it means doing so without the aid of America's closest allies, the officials said.

The Associated Press and The New York Post contributed to this report.