Bitter differences between UN member states have blocked many crucial reforms, and nations must act boldly to restore the world body's credibility, Secretary-General Kofi Annan told a summit of world leaders.
Presidents and prime ministers were more blunt about the UN system at the gathering that marked the organization's 60th anniversary.
"If member countries want the UN to be respected and effective, they should begin by making sure it is worthy of respect," US President George W. Bush told the summit on Wednesday.
"The UN should live up to its name," Britain's Prime Minister Tony Blair said.
Instead of a celebration of UN achievements since its founding in the ashes of World War II, the summit was much more a somber reappraisal of the UN's shortcomings and a debate about how to meet the daunting challenges of a world where poverty and violence are still endemic.
Coming into the summit, diplomats had to dilute a document on goals for tackling rights abuses, terrorism and UN reform because they couldn't settle their disputes.
Addressing the summit that he called a year ago in hopes of winning approval for an ambitious blueprint to modernize the UN on its 60th anniversary, Annan told more than 150 presidents, prime ministers and kings that "a good start" had been made with the document.
But he also said leaders must "be frank with each other, and the peoples of the UN. We have not yet achieved the sweeping and fundamental reform that I and many others believe is required."
The summit began a week after investigators criticized alleged corruption and UN mismanagement of the oil-for-food program in Iraq, and on a day when more than 160 people died in attacks in Baghdad -- a harsh reminder of the fight against terrorism that was highlighted in Bush's speech.
A key goal of the summit is to take action to achieve the UN Millennium Development Goals, a set of eight targets meant to reduce global poverty and disease by 2015.
The leader of the Netherlands challenged other rich nations to join the handful of countries that have committed to meeting the millennium goal of setting aside 0.7 percent of their gross national product for overseas development aid. The US strongly opposes the target.
Dutch Prime Minister Jan Peter Balkenende said there is only a slim chance of meeting the millennium goals.
"The shortfalls are serious. Nothing less than an extra US$50 billion to US$60 billion must be raised every year" to achieve the goals, he told the UN World Summit.
In his speech, Bush broadened the terrorism fight beyond the military arena, saying world leaders have "a solemn obligation" to stop terrorism in its early stages.
Declaring that poverty breeds despair and terrorism, he challenged leaders to abolish all trade tariffs and subsidies to promote prosperity and opportunity in poor nations, a move that would be worth billions of dollars.
"Either hope will spread, or violence will spread, and we must take the side of hope," he said.
This approach -- and Bush's support for achieving development goals such as halving extreme poverty by 2015 -- was welcomed by many leaders.
Irish rocker Bob Geldof, who organized the Live Aid concerts and campaigns against poverty, said he was sitting in the General Assembly chamber with UN anti-poverty chief Jeffrey Sachs and they couldn't believe what they heard.
"I think he's really throwing down the gauntlet. It's a very bold move," Geldof said of Bush's trade tariff proposal, adding that he was impressed with the president's acknowledgment that terrorism comes from despair and lack of hope."
And while diplomats could not agree on reforming the long-outdated UN Security Council despite Annan's urgings, several nations made clear they won't back down on their demand for change.
Even so, they displayed some of the national rivalries that have blocked expansion so far. South Korean President Roh Moo-hyun made a veiled reference to Japan's ambition for a permanent seat on the council in telling the assembly that council reform must proceed democratically.
"Let me stress that any reform plan we arrive at should serve to facilitate harmony among nations, rather than presage another variant of great power politics," he said.
Other familiar tensions were also evident.
Soon after the new Iranian President Mahmoud Ahmadinejad got up to speak, two US diplomats left the General Assembly hall, leaving two note-takers behind. The US Mission denied any symbolism in the decision.
Zimbabwe's President Robert Mugabe made a thinly veiled criticism of the US-led war in Iraq, saying "the mighty and powerful" have violated the sovereignty of small and weak countries.
On the other hand, Israel's Prime Minister Ariel Sharon shook hands with Pakistani President Pervez Musharraf, who heads one of the largest Islamic countries.
"I did shake hands with him, he asked me how I was, I asked him how he was. That's very good," Musharraf told reporters.
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