The United Nations General Assembly has formally lifted a spending cap restricting budget allocations to the first half of this year, affirming a recommendation by its main administrative committee, which earlier this week achieved a breakthrough on the issue that had threatened financial crisis at the world body.

Warning that the United Nations is facing “a moment of truth,” Secretary-General Kofi Annan is urging all UN Member States to tone down their rhetoric over a proposed package of reform measures and join forces to reach a sensible compromise that will prevent a budget crisis and pave the way for more fundamental change later.

The United Nations Deputy Secretary-General today called for greater United States engagement with the UN, warning that Washington cannot “go it alone” in approaching diverse problems ranging from the threat of bird flu to the situation in violence-wracked Darfur, Sudan, while the world body needs its host country’s leadership to tackle these pressing challenges.

A caucus of developing countries showed its muscle on the United Nations budget committee this evening by pushing through a draft resolution that would effectively slow a series of reform proposals aimed at overhauling the world organization's management structures which was put forward by Secretary-General Kofi Annan, who immediately voiced regret at the vote and vowed to continue trying to forge an agreement among UN Member States.