The molotov cocktail was named after a Soviet foreign minister during World War 2, and is technically defined as simply any inflammable liquid in a glass bottle. The device was first used during the Spanish Civil War.

There are two competing histories of the origin of the name; one holds that it was so called by Russian troops against the Nazi panzer invasion. The more likely story places its origins with the impoverished Finnish military during the Winter Wars, when equipment was scarce and gasoline was still plentiful. Finnish public opinion largely blamed Molotov for the war.

Either way, a tow cloth wrapped around the bottle is lit, then thrown, in the hopes of shattering the bottle and spreading the contents. Against tanks, the targets are the engine compartment and the gap between the turret and hull, in hopes of spreading the flame into and igniting either the ammunition or fuel reserve. This sounds much easier than it is, and often resulted in the soldier attempting this with a bottle shot out of his hand, turned into a human torch.

IIRC, the Molotov Breadbasket was used to refer to Soviet RRAB (Rotativno-Rasseivajuschtschaja Aviabomba) bombs, which spun to disperse incendiary bomblets over the immediate area where they fell. The bombs were used by the Soviets during the Winter War of 1939-40 between the USSR and Finland. The nickname stuck when the Soviet foreign minister, Vyacheslav M. Molotov, denied reports of the attacks on Finland, and claimed that the Soviet Air Force was dropping breadbaskets instead of bombs.

Almost inevitably, the guerrilla resistance fighters and regular Finnish soldiers started using the term 'Molotov Cocktail' to describe incendiary bottle bombs, in additional honor of that claim.

This writeup is based on information from the Battles of the Winter War website, provided at these URLs:

It should probably be mentioned that Molotov cocktails (or "petrol bombs" depending on the nomenclature of choice) didn't just end up serving as cheap ad hoc weapons for the impoverished Soviet and Finnish armies during the second world war; the Third Reich actually mass-produced the primitive incendiaries as a standard-issue form of ordnance for the Wehrmacht.

The Germans manufactured two different types of bombs, each utilizing a specially-concocted incendiary fuel solution designed for maximum effectiveness. The first was the Brandflasche, a glass bottle about 25 cm high and 7 cm wide, filled with a mixture of two parts normal gasoline and one part flamethrower fuel (called "Flammöl.") The other weapon was produced under the name of the Brandhandgranate 48/57, a round glass container about 10 cm high and 8 cm wide that resembled more of an actual grenade. It contained a hearty 500 ml of a mixture of gasoline and benzole.

http://www.geocities.com/Augusta/8172/panzerfaust9.htm

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