BAGHDAD, Iraq (AP) _ Some $300 million worth of medicines and health care equipment are languishing in Iraqi warehouses, partly because the staff lack the competence and motivation to distribute them, U.N. Secretary-General Kofi Annan reported Thursday.

Iraq's 22 million people, particularly its nearly 4 million children, badly need the drugs, Annan said in a report released in Baghdad, the capital.

One out of every three children below the age of 5 is malnourished, owing to shortages caused by the sweeping U.N. trade sanctions imposed on Iraq after its invasion of Kuwait in 1990. Annan added that Iraqis suffering from chronic diseases lack 30 percent to 60 percent of their drug requirements.

Iraq has frequently blamed the sanctions for the deaths of children, and has pointed the finger at the United States and Britain as the strongest opponents of any easing of the embargo.

Annan said the medicines and equipment in Iraqi warehouses amount to more than half of the value of the medical supplies that have arrived in Iraq since the start of an oil-for-food program in 1996. The program allows Baghdad to sell limited quantities of oil on condition that the proceeds are used to buy food, medicine and humanitarian goods for its people.

``The reasons for distribution bottlenecks are multiple and complex,'' Annan said.

While his report stops short of blaming the government of President Saddam Hussein, Annan says a key reason for the stockpile is a ``decline in professional competence and motivation'' among Iraq's health personnel.

He suggested the United Nations set up a program of ``human development and training for (Iraq's) health sector'' to accelerate the distribution.

Further, the government body running the warehouses lacks proper handling equipment and transport to move the supplies, Annan said.

The United Nations is conducting intensive talks with the government in a bid to find a solution to the distribution bottlenecks, the report said.

Annan submitted the report to the U.N. Security Council earlier this week.

The United States and Britain say that Iraq must prove it has destroyed its long-range missiles and weapons of mass destruction before the U.N. embargo can be lifted.