When it comes to the U.N. trade sanctions imposed on Iraq after it invaded Kuwait in 1990, the official line of President Saddam Hussein's government is that the continued embargo has been responsible for a steady deterioration in living conditions.

So it was something of a surprise today when the government permitted UNICEF, the U.N. Children's Fund, to release a report saying the malnutrition rate among Iraqi children has fallen significantly since 1996. UNICEF attributed the drop primarily to an exemption in the sanctions that allows the Iraqi government to sell oil to buy food, medicine and other humanitarian supplies.

"It is undeniable that the oil-for-food program has had a positive impact on the well-being of children in Iraq," said Carel de Rooy, the director of UNICEF operations in Iraq.

According to a survey UNICEF conducted in conjunction with Iraq's Health Ministry, the proportion of children suffering from chronic malnutrition fell from 32 percent in 1996 to 23 percent this year. The figure for underweight children dropped from 23 percent to 9 percent in the same period.

Although the survey was finished over the summer, U.N. officials said they did not receive permission from the Iraqi government to release the results. U.N. officials said they were told the report needed approval from several people in different ministries, but they believed Iraqi officials were worried about releasing a report contrary to official pronouncements.

A few days ago, U.N. officials were told they could issue the report. But when UNICEF held a news conference at a hotel in Baghdad to release the findings, cameras from Iraq's government-run television stations, a conspicuous presence at most news events here, were absent. At the news conference, de Rooy emphasized that more improvement is needed in children's nutrition. Nearly 1 million Iraqi children still suffer from chronic malnutrition, he said.

"This is unacceptable," he said. "More still needs to be done to end the suffering of a generation of children."

De Rooy also posed a question to himself: "Should the government receive credit for this achievement?"

"Definitely," he said.

De Rooy said the government had "not really objected" to the release of the report. "The bureaucracy here is quite slow," he said. "Getting permission to release these things takes time."

He said he expects the improvements in nutrition to translate into a reduction in childhood mortality, although UNICEF has not yet started a study of that issue. The Iraqi government has said1.7 million children have died from disease, malnutrition and other causes as a result of the sanctions. U.N. officials and Western health specialists who have studied the conditions in Iraq said they believe that figure to be inflated.

One of the few Western humanitarian workers in Iraq, Margaret Hassan of the aid organization Care International, called the UNICEF figures "incredibly important," but warned against "blowing up the importance of discrete items to reflect an overall change in society."

"The quality of life that most people have has not really changed much," she said. "There still is an unacceptably high level of poverty."

U.N. officials also have expressed concern that recent drops in Iraq's oil exports under the oil-for-food program could jeopardize purchases of food, medicine and other products approved by the U.N. Security Council.

Iraq currently has contracts approved by the United Nations to buy $2.96 billion worth of humanitarian supplies that it cannot pay for, according to U.N. documents. Some of those purchases are foodstuffs, distributed according to a rationing system that provides Iraqis with a basic diet.

From May 30 to Nov. 15, Iraq exported 194.4 million barrels of oil out of the 489 million barrels approved by U.N. oil overseers, the lowest level of shipments since 1998. Oil industry analysts attribute the decline to several factors, including a desire by purchasers to line up other suppliers because of fears about a possible war and a U.N. requirement that Iraq set its oil prices at the start of each month. This is meant to prevent the government from retroactively imposing surcharges that U.S. officials allege were being used to buy arms and other prohibited items.

U.N. officials have expressed concern that the revenue shortfall could have serious consequences on the government's ability to address humanitarian needs by early next year.

"We're ringing the alarm bell," said Ali Hamati, a spokesman for the U.N. humanitarian operation here. "If things continue as they are, we'll start to see a very serious impact. Many of the gains we've achieved could be eroded."

A vendor in Baghdad shaves off lamb during the breaking of the fast for Ramadan. The U.N.-sponsored oil-for-food program has eased malnutrition.