"If countries overreact and are overly punitive in their reaction when this disease is reported, that reduces the incentive for other countries to report," said Charles Lambert, a U.S. undersecretary of agriculture.

China has earmarked $248 million to combat bird flu in the country, while $20 million of the $7.1 billion avian-flu allocation announced by President Bush Tuesday will be used to monitor poultry and outbreaks in developing countries.

In other developments:

-- Vietnam, which has seen nearly 60 percent of the world's human deaths from avian influenza, will be the recipient of millions of U.S. dollars, as President Bush has proposed making and testing a bird-flu vaccine in the region.

-- Malaysian officials have expressed concern about the threat of avian flu on their borders and plan to stockpile enough Tamiflu to treat 25 percent of its 26 million people.

As Roche, the makers of Tamiflu, has a limited capacity for production, Malaysia may manufacture the drug locally -- with or without a license.

"Some people have spoken to us about the fact that they have got some understanding that they can produce Tamiflu," Mohd Ismail Merican, director general of health for Malaysia, told Bloomberg.com in a telephone interview. He declined to name the companies.

-- The 21 nations of the Asia-Pacific Economic Cooperation group are concerned that "scaremongering" over avian influenza is negatively impacting the Pacific Rim economy and inhibiting the countries' ability to plan for a potential pandemic.

APEC states have decided to coordinate pandemic-response plans, share expertise and perform regional bird-flu preparedness exercises by early 2006.

-- Thailand Wednesday reported a further outbreak of avian flu in poultry. Birds were reported to have died from the disease in Ang Thong, the seventh province to have been affected.

Although no people in the region have reported flu-like symptoms, locals will be monitored for 16 days.

-- As there had been no further spread of avian influenza in the region, and no humans became infected with the virus, Russian officials announced Wednesday that the current outbreak had been contained and lifted the quarantine in place in the Tyumen region.

-- New Zealand has proposed new laws to combat the potential pandemic.

The laws, which the Cabinet hopes to have passed by Christmas, include proposals to close borders, quarantine citizens returning from infected areas and isolate the spread of disease through the closure of schools, universities and public gatherings.

The concern with avian influenza is that it might combine with a form of influenza transmissible from human to human and set off a deadly pandemic.

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