The Bush administration appealed to House Republicans on Wednesday to drop a proposal to withhold funding from the United Nations unless it meets a list of demands for change, saying that it would hamstring the president's ability to conduct foreign policy and undermine U.S. leadership at the world organization.

Administration officials staked out the position as the House prepared to debate the legislation Thursday that would cut the U.S. contribution to the United Nations by half if conditions were not met.

"This would undermine American credibility at the United Nations, it would undermine our effectiveness," Undersecretary of State R. Nicholas Burns said of the bill. "It would call into question our reliability as the founder and host nation and leading contributor to the United Nations and it would also harm our image worldwide."

Rep. Henry J. Hyde (R-Ill.), chairman of the International Relations Committee and sponsor of the bill, vowed to press ahead. "The Constitution gives to Congress the power of the purse," he said in a statement. "We intend to exercise it in pursuit of meaningful U.N. reform."

The debate over the U.S. approach to the United Nations came as the Bush administration outlined for the first time its position on expansion of the 15-nation Security Council. A senior State Department official said that the United States will oppose a plan by four Security Council aspirants -- India, Germany, Japan and Brazil -- to add six permanent seats and four rotating spots.

Instead, the official said, the United States is prepared to support a more modest increase, up to two new permanent members and as many as three rotating nonpermanent members.

The U.S. official said the proposal for the bigger council expansion was "divisive. It's not going to be agreed to ultimately. China is not going to agree to it. Russia wouldn't."

President Bush and Russian President Vladimir Putin on Wednesday discussed expansion of the Security Council by phone, the White House said. While the two leaders expressed support for Japan's bid for a permanent seat, they sought to play down the importance of expanding the council, officials said.

"The presidents agreed that we should look at the issue of Security Council reform within the broader context of U.N. reform," White House spokesman Scott McClellan said.

Burns said it is more important to press for "structural reforms" that would strengthen the United Nations' capacity to administer the sprawling organization.

He said that the United States supports the creation of a peace-building commission to manage postwar reconstruction efforts, a democracy fund and the replacement of the discredited U.N. human rights commission, "where Zimbabwe and Sudan sit in judgment of democratic countries."

The reform debate is unfolding as U.N. Secretary General Kofi Annan faces renewed scrutiny by a U.N.-appointed committee probing corruption in the $64 billion oil-for-food program in prewar Iraq. The committee, headed by former U.S. Federal Reserve Bank chairman Paul A. Volcker, announced Tuesday it is reopening an investigation into whether Annan steered oil business to a Swiss company that once employed his son.

The latest move was triggered by the release of a memo from an executive of the company, who said Annan and his staff had pledged in a 1998 meeting in Paris to support the Geneva-based Cotecna Inspection SA's bid for a $10 million-a-year contract to monitor humanitarian imports into Iraq. A lawyer for the former Cotecna executive, Michael Wilson, issued a statement Wednesday saying that he never held such a meeting.

Annan denied any wrongdoing and told a French newspaper that he does not intend to resign. He also warned that congressional "threats" to withhold money from the United Nations were complicating his efforts to advance a series of reforms.

The Bush administration, meanwhile, welcomed a report Tuesday by a congressionally mandated task force on U.N. reform that sharply criticized the world body for not stopping genocide in Sudan or undertaking "anything approaching the sweeping reforms" needed to ensure the organization can overcome several scandals that have tarnished its reputation.

The bipartisan 12-member panel urged the Bush administration to join forces with other democracies to improve the organization's capacity to combat terrorism, stop the spread of the deadliest weapons, and prevent mass killings of civilians in the world's trouble spots. The task force was chaired by former House speaker Newt Gingrich (R-Ga.) and former Senate majority leader George J. Mitchell (D-Maine), and urged better oversight of U.N. spending, protecting whistle-blowers and shedding unneeded staff.

"This task force has concluded that concerted leadership by the United States in helping unify action by the world's democracies is the essential mechanism needed to make the United Nations more relevant and effective," the report said.

U.N. Secretary General Kofi Annan faces renewed scrutiny.