At a time of year when most players are nursing weary and often injured bodies after a long and bruising season, Nadal says things couldn't be better.

"I'm in perfect shape, both mentally and physically," Nadal said Friday. "I've had the best end of the season in my life."

That freshness came at a steep cost, however, as knee tendinitis prevented him from defending his Wimbledon title and an abdominal injury forced another layoff after the U.S. Open. Now the second-ranked Spaniard says he is returning to his top form, after reaching the Shanghai Masters final last month and the Paris Masters semifinals last week.

"I am close to my absolute best. I am playing well," he said. "And this situation, getting to play against the best players in the world, is perfect for me."

The ATP World Tour Finals, the latest incarnation of the nearly 40-year-old elite season-ending tournament, features eight of the nine top-ranked players in the world, with a round-robin before the semifinals and final.

Nadal's first match will be against bitter rival Robin Soderling on Monday, giving him a chance to avenge his surprising fourth-round loss at the French Open against the Swede _ who qualified for the event as an alternate after Andy Roddick pulled out.

But it's not Soderling _ or even top-ranked Roger Federer _ whom Nadal seems worried about.

The Spaniard will also face Novak Djokovic in the group phase, and insists that the third-ranked Serb is playing the best tennis of his life.

Djokovic beat Nadal in the Paris semis en route to his second straight title, after beating Federer in the Swiss Indoors final the previous week.

"If I play my best tennis, and he plays like he did (in Paris), it's going to be almost impossible" to beat him, Nadal said.

Djokovic is also the defending champion after winning the lucrative event in Shanghai last year, and said he has a lot more to play for than just the rich prize.

"I rate the world tour finals, besides grand slams, as the biggest event in our sport," Djokovic said. "So being a title defender is a big responsibility."

The money doesn't hurt either. An undefeated champion will take home $1.63 million, with $120,000 knocked off for each loss in the round-robin.

Djokovic plays Nikolay Davydenko in the first round, while Federer's group includes U.S. Open champion Juan Martin del Potro, Andy Murray and Fernando Verdasco.

Federer lost to Julien Benneteau of France in the second round in Paris last week, and will play Verdasco on Sunday in his first match in London's O2 Arena. In a field this tough, Federer said he can't take any match for granted.

"At the very last tournament of the season we could be sent home packing with three defeats," Federer said. "But we can also go home having the best feeling in the world after beating all your closest rivals you've had through the year."

Federer also has his No. 1 ranking to protect. Nadal has a slim chance of taking the year-end top spot if he wins the event and the Swiss star has a poor performance.

"I'm aware of it. I'd be lying if I say I'm just here to play well," Federer said. "Definitely, I'm here to win the tournament and try to stay No. 1 in the world."

Nadal, however, tried to downplay his chances of returning to the top of the rankings.

"If I win the tournament, it doesn't matter to me if I'm No. 10," he said. "The rest of the things, No. 1, No. 3, it doesn't matter."

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AP Sports Writer Chris Lehourites contributed to this report.