GENEVA -- The World Health Organization (WHO) urged governments on Monday to raise cigarette and tobacco prices by at least five percent after inflation, saying this could save millions of lives, Reuters reported.

Citing a report by the World Bank, the United Nations agency said a 10 percent price hike would induce 40 million people worldwide to give up smoking and millions more never to start.

"This price increase would save 10 million lives.

Nine million of the premature deaths avoided would be in developing countries," the WHO said.

But if countries found 10 percent too steep, they should make a start with five percent.

"Tobacco tax increase is an effective public health intervention, especially in the area of preventing youth initiation," the agency said.

The Geneva-based WHO issued its call on the eve of fresh talks among its 192 member states to agree the first ever International Treaty to Curb Smoking.

The Framework Convention on Tobacco Control (FCTC), on which negotiations began in 1999, is due to be completed by May 2003 when the WHO holds its next annual meeting.

The health body recently revised upwards its estimate for the annual death toll from smoking related diseases to 4.9 million people from 4.2 million, largely as a result of better research into the extent and causes of cardiovascular disease in developing countries.

It also said its forecast of 10 million deaths a year by 2030 was probably an underestimate.

Higher taxes would reduce tobacco demand most sharply in less wealthy countries and among young people, the WHO said.

Under the proposed anti-smoking treaty, countries would commit themselves to eliminating advertising and the use of terms such as "mild" and "low tar" which the WHO regards as misleading.

They would work together to combat cigarette smuggling, which weakens the anti-smoking drive, and to exchange information and research results that could be used in cases of litigation against tobacco companies.