The agency said intelligence sources suggested that Mr Koresh, who is with at least 31 British followers, had rockets as well as explosives and automatic weapons in his huge cache of arms inside 'Ranch Apocalypse', his headquarters near Waco.
The federal authorities said the cult leader had repeatedly tried to provoke government forces by challenging them to launch an attack and boasting about his fire power.
The Branch Davidians, an extremist offshoot of the Seventh Day Adventists, have been surrounded by 400 police and federal agents since a raid nine days ago by the Bureau of Alcohol, Tobacco and Firearms turned into a 45-minute gun battle in which four agents were killed.
The government forces around the compound include Bradley armoured vehicles. Mr Koresh claims he can blast the vehicles '40 to 50 feet in the air', according to the FBI.
In a televised press conference, almost certainly watched by Mr Koresh and his aides, the FBI painted a graphic picture of the cult leader, portraying him as an erratic fanatic, supported by a devout and mostly unified hard core of followers who are prepared to die for their cause.
Bob Ricks, an FBI special agent, said Mr Koresh had told negotiators: 'We are ready for war, let's get it on. Your talk is becoming in vain. I am going to give you an opportunity to save yourself before you get blown away.'
He said that Mr Koresh claims to have been preparing for a confrontation with the US authorities since 1985, amassing guns and explosives. Mr Koresh, a 33-year-old failed rock musician, believes his holy mission would be fulfilled if he were killed in a gun battle with government forces.
'He has indicated he would be most pleased if we would engage in a gun battle willingly,' Mr Ricks said.
'Our greatest fear is that he is so intent on provoking a situation where our people are fired upon that we may feel it is necessary to fire back. That is not our desire at all.' The tanks would be unarmed, and intended 'purely for defensive purposes', he said.
The cult has been strengthening its already fortified compound, which has a watchtower, large supplies of food and access to well water. According to the FBI, cult members have been waving automatic weapons provocatively out of specially constructed gun portholes in the walls.
Mr Koresh claims to have 107 followers with him, including 47 women and 17 children. The Foreign Office has revised its estimate of Britons to 31, although it says the number could be as high as 45.
FBI negotiators have spoken by telephone to 33 people in the compound, and have concluded they appear to be ready to die for the cause. Most recently they spoke to 10 adults and three children, including two children of Mr Koresh, who has a number of 'wives' among his followers.
'They were all completely devoted to David and what he was trying to accomplish,' Mr Ricks said.
Arming for Armageddon, page 12