GENEVA (AP) _ The United States threatened on Tuesday that it may withhold funds from the World Health Organization if Hiroshi Nakajima of Japan is re-elected as its director-general.

Japan, meanwhile, countered accusations that it used bribery to try to buy another term for Nakajima by accusing his foes of using smear tactics in the world news media to block his re-election.

The battle heated up on the eve of a vote that will decide whether Nakajima stays on for five more years as chief of the U.N. health agency or is replaced.

The United States and Western Europe had openly campaigned for Mohammed Abdelmoumene of Algeria, saying Nakajima was a poor manager and communicator who had lost the support of WHO's 6,000-member staff.

The 185-nation World Health Assembly, which meets annually to decide WHO policy, votes Wednesday on a second term for Nakajima. He also wants it to approve a $1.8 billion budget for the next two years.

The U.S.-Japan clash came during a review of an audit of WHO, which focused on awarding of contracts to members of the WHO Executive Board before the board voted 18-13 in January to renominate Nakajima.

The World Health Assembly usually routinely endorses the Executive Board's choice, and it was widely expected to follow previous practice and approve Nakajima.

Board chairman Jean-Francois Girard of France said 23 of the 31 board members received contracts. Although not forbidden by WHO rules, ''it's a problem of ethics,'' he said.

Girard ordered the audit after reports that Japan was using threats and vote-buying to win the director-general's re-election.

Canada called for a ban on contracts with board members and recently retired staff. Eldrid Nordbo, a spokesman for the Nordic countries, called WHO practices ''a very undesirable and worrying phenomenon.''

Masao Kawai of Japan's Foreign Ministry noted that the auditor's report found ''shortcomings'' in WHO procedures, but ''no fraud or serious violation.''

But U.S. official Walter Broadnax said President Clinton could expect problems with Congress unless major changes were undertaken at WHO.

He said the Clinton administration and the governments of ''many other nations cannot justify going to our legislatures and people to request funds for WHO unless we can assure those people that corrective steps are being taken in relation to both the fact and the appearance of any misconduct.''

''Only managerial and leadership changes can prevent further erosion'' in WHO's effectiveness, said Broadnax, of the Department of Health and Human Services.

''The question is not whether these contracts were technically within the rules,'' he said. WHO ''must meet the highest standards of accountability.''

WHO leads the world fight against AIDS, infectious diseases and tropical maladies that endanger millions in developing countries.

Some delegates said it was long-standing WHO tradition to give contracts to Third World board members because they were often the most capable health experts in their countries.

About 62 such contracts were awarded in the final half of 1992. The largest - for $150,000 - went to a Philippines former health minister for a study of his country's health system.

Bangladesh accused the West of spreading ''political disinformation'' about Nakajima. The Philippines said international news media had mounted a ''vicious and malicious campaign'' against him.

Kawai said Japan was concerned that the audit focused on WHO's use of Japanese donations in awarding some of the contracts. He said that if no rules were broken, ''this should have been clearly stated.''