He told a special meeting of the Security Council that restricting the flow of such weapons would be a key challenge in preventing conflict in the next century.

The BBC's Mark Devenport: ''Several countries argued in favour of marking small arms'

Estimates of the number of firearms in the world range from 100 million to 500 million.

Mr Annan said there was "no single tool of conflict so widespread, so easily available, and so difficult to restrict, as small arms".

''Not only are they the primary instrument of the murder of civilians who are increasingly targetted in civil wars of our area but, unlike their victims, small arms survive from conflict to conflict,'' he added.

US action

US Secretary of State Madeleine Albright said America would "refrain from selling arms to regions of conflict not already covered by arms embargoes".

"We have passed laws making it illegal for [arms] traffickers subject to American law to broker illicit deals anywhere. We ask others to crack down on brokering as well."

France says children are often the last to turn in their arms

British Foreign Secretary Robin Cook said $5 million would buy ''approximately 20,000 assault rifles - enough to equip the army of a medium-sized state".

He said conflicts fought with small weapons had killed more than three million people in the past decade alone.

"We need to regulate and make more transparent the official trade in firearms. And we must drive out the business in the illicit traffic in firearms."

Gem trade

Mrs Albright also recommended cracking down on the illicit trade in precious stones, which is used to raise money to buy arms.

Diamond sales funded the RUF in Sierra Leone

"The United States accounts for 65% of the world's gemstone market, and we recognise that we must play our part to end illicit transactions," she said.

Mrs Albright cited the example of Sierra Leone, where she said illicit profits from diamond sales had "allowed the RUF (the rebel Revolutionary United Front) to transform itself from a band of 400 into a marauding army of thousands".

Several members of the Security Council spoke in favour of marking and registering firearms, so that their movement could be tracked. Canada suggested ammunition should also be branded.

But China opposed strict controls, saying that countries should be allowed to manufacture and export small arms.

Annan's proposals

In his report Mr Annan recommended that member states should:

• Better enforce UN arms embargoes on nations in conflict

• Adopt gun control laws including a prohibition of unrestricted trade and private ownership of small arms

• Require arms manufacturers to put serial numbers and identification marks on weapons

• Ensure stockpiles of unmarked weapons are carefully guarded to prevent theft, and destroyed as soon as possible

• Share information on the registration of guns and on legal transactions, in order to trace black market deals

• Stop shipments of weapons to regions of conflict

A brochure produced at the meeting by the Netherlands said an AK-47 assault rifle could be bought in Uganda for the price of a chicken, in Kenya for the price of a goat and in Mozambique and Angola for the price of a sack of corn.