MONTERREY (Mexico), March 23: Buoyed by US and European pledges of fresh cash for impoverished nations after years of declining foreign aid, world leaders wrapped up a UN summit with a boast that they had laid the groundwork for a renewed assault on extreme poverty.

Rich countries and poor have struck a new bargain to fight poverty, said Mexican President Vicente Fox, who hosted the International Conference on Financing for Development in the northern industrial city of Monterrey.

“We can speak of a new commitment between countries in the vanguard and countries bringing up the rear,” Fox told a news conference at the summit’s end on Friday.

The summit was the brainchild of UN Secretary-General Kofi Annan, who wanted to line up the resources for a broad strategy against world poverty drafted by the United Nations’ 189 members at their 2000 millennium summit in New York.

The goals include reversing the AIDS epidemic, providing universal primary school education and halving by 2015 the number of people living on less than a dollar a day. Some 1.2 billion people now live in extreme poverty.

The next step in Annan’s campaign is to lay out the specific programme required to achieve those goals, at yet another summit opening in Johannesburg in August.

World leaders said the significance of the Monterrey meeting was that it resulted in a consensus that wealthy nations had an obligation to provide more development aid and slash trade barriers while poor nations were obliged to make sure the money was well spent. That means fighting corruption, improving government efficiency, and assuring that aid leads to measurable results.

The United States and the European Union played crucial roles in the meeting’s success by pledging to increase significantly their aid commitments, although by much less than many other nations had hoped.

US President George W. Bush pledged an additional $10 billion over a three-year period while the EU said its donations would rise gradually over the next several years, reaching an extra $7 billion a year by 2006. The United States now gives about $10 billion a year in development aid, and the European Union about $25 billion.

Japan, whose $13 billion a year in foreign aid makes it the world’s largest donor nation, said its troubled economy prevented it from giving more at this time.

While the overall increases were well below the doubling of foreign aid called for by Annan — which would have meant an extra $50 billion a year — rich and poor nations alike conceded it was a good start.

“We have to be practical,” said Cambodian Commerce Minister Cham Prasidh. “We cannot ask the rich countries to do more than what they can afford at this moment. We shall wait for better days. We do hope those better days will come soon enough.”

The US commitment was the biggest surprise at the weeklong conference. Bush, who boasts that his administration is run like a business, had been expected to come to the meeting to scold poor nations for wasting aid in the past.

Instead he pledged more cash on condition recipients root out corruption and government inefficiency.

In a speech on the conference’s closing day, Bush led calls from the world’s rich countries and aid agencies to developing nations, promising them more aid if they pursue sound policies and open their markets.

“We must tie greater aid to political and legal and economic reforms,” Bush told the more than 50 world leaders who gathered in Monterrey.

“Only a few weeks ago this summit was heading for failure,” Spain’s Prime Minister Jose Maria Aznar said. “We therefore have reasons to be satisfied.”

A declaration drafted in advance and adopted by acclamation on Friday envisioned freer trade, more foreign investment, debt relief and efficient government as well as extra aid to give a hand to the nations most in need of outside help. —Reuters