U.N. diplomats say they are concerned that calls for Secretary-General Kofi Annan's (search) resignation and allegations of widespread corruption in the U.N. oil-for-food program in Iraq could derail plans for a sweeping reform of the United Nations.

When a blue ribbon panel, after a year's work, released a report last week on how the world body should tackle wars, terrorism, nuclear proliferation, poverty and other threats, the spotlight should have been on its 101 recommendations.

Instead the report was eclipsed by headlines that Sen. Norm Coleman, R-Minn., was calling for Annan's resignation over the oil-for-food allegations.

Algeria's (search) U.N. Ambassador Abdallah Baali said "many are concerned ... because we are distracted now (and) we will not be able to focus on the panel report."

"There is a growing movement to defend the secretary-general and the United Nations, because member states feel that the attack is not only on the secretary-general but on the U.N.," he said.

Annan has called a September 2005 summit in hopes of getting agreement on major reforms, including an expansion of the U.N. Security Council (search). But whether his effort will succeed remains in question.

A lot depends on the United States and the results of the U.N.'s oil-for-food investigation headed by former U.S. Federal Reserve Chairman Paul Volcker, as well as five U.S. congressional inquiries.

The Bush administration is unhappy with Annan over Iraq. He called the war "illegal," wrote a letter opposing the U.S. operation in Fallujah, and has been reluctant to send a large number of experts to help Iraq hold elections.

After the call for Annan's resignation, President Bush twice refused to back him. He said he wanted a thorough, transparent investigation of the oil-for-food program.

But on Thursday, U.S. Ambassador John Danforth expressed confidence in Annan on behalf of the administration and said he should remain at the helm of the United Nations, an abrupt turnaround.

"We are not suggesting or pushing for the resignation of the secretary-general," Danforth said. "We have worked well with him in the past and look forward to working with him for some time in the future."

The Senate Permanent Subcommittee on Investigations, which Coleman chairs, reported that Saddam Hussein's government subverted U.N. sanctions and the oil-for-food program to garner $21.3 billion in illegal revenue.

Annan's son, Kojo Annan, has come under scrutiny for work he did for a company that had a contract in the oil-for-food program, receiving payments for more than four years after his job ended. He worked for the company in Africa, not Iraq.

Annan has also faced criticism over his handling of allegations of sexual abuse by 150 U.N. peacekeepers in Congo. A resolution by U.N. staff expressed a lack of confidence in senior management, and Annan's decision to clear a top official of wrongdoing.

The secretary-general said Tuesday he intends to remain at the helm of the Nations and concentrate on U.N. reform in his final two years.

"I think I'm working well with the member states," Annan told reporters Wednesday after receiving a standing ovation in the General Assembly. "I think the report is appreciated, and we do have quite a bit of work to do."

The high-level panel called for an expanded and more active Security Council with authority to take action to prevent conflicts or potential genocides. It also called for a new body to help failing states and countries emerging from conflict during their difficult transition to peace and democracy.

U.S. support for any reform of the United Nations is crucial because of Washington's veto power.

Asked whether he was concerned that calls for Annan's resignation could set back the reform initiative, France's U.N. Ambassador Jean-Marc de La Sabliere said: "This is a concern we all have."

Russia's U.N. Ambassador Andrey Denisov said Annan doesn't need praise or criticism. "What ... we all need is strong leadership, especially now," he said.

An "investigation should be carried out, but not in such aggressive manner which can undermine the activity of one of the leading world institutions," Denisov said.

The oil-for-food program, initiated and monitored by the U.N. Security Council and run by the U.N. secretariat which Annan heads, allowed Iraq to sell unlimited amounts of oil provided the money went primarily for humanitarian goods and reparations for victims of the 1991 Gulf War.

Britain's former U.N. Ambassador Jeremy Greenstock, now the director of the Ditchley Foundation, a British think tank, stressed that the 95-page reform proposal should be examined "on the basis of the facts and not prejudiced speculation."

"This is the best secretary-general we've had since Dag Hammarsjold," he said in a telephone interview.

Nile Gardiner, a fellow in Anglo-American security policy at the conservative Heritage Foundation, said he believes "any major reform of the United Nations will be impossible under Kofi Annan."

Annan has "little credibility with the Bush administration" and the panel's report restricts American foreign policy and "is all about the power of the U.N. over the individual nation state, and it is indirectly fiercely critical of the doctrine of pre-emptive strike."

Gardiner said he believes Annan will resign.

"What we are seeing are public displays of support for Annan from many world leaders. Yet behind the scene, countries are feverishly working to put forward their own candidate to replace Annan, especially from Asia," he said.

At the United Nations, some diplomats and officials said they believe that if the Bush administration told the secretary-general it had no confidence in him, he would have no choice but to step down.