updated 12/23/2005 8:43:22 PM ET 2005-12-24T01:43:22

U.N. members agreed Friday night on a two-year budget that includes a $950 million spending cap aimed applying pressure for management reforms — a top priority for the United States and the European Union.

The General Assembly’s budget committee scheduled an immediate meeting and was expected to approve the agreement.

U.S. Ambassador John Bolton called the approval a victory for the United States. Britain’s U.N. Ambassador Emyr Jones Parry, whose country holds the EU presidency, said he wouldn’t claim victory for the 25-member bloc but for the United Nations.

The agreement was reached after weeks of intense negotiations and a final round of meetings in the private office of General Assembly President Jan Eliasson. Ambassadors from wealthy and developing nations who had been at odds over the budget emerged together and announced that a deal had been reached.

Earlier, the powerful Group of 77, which represents 132 mainly developing countries, said it would only agree to a $1.3 billion cap on U.N. spending. Several key members, including Egypt and India, also objected to any link between the new budget and management reform, which is a top priority for the United States and European Union.

The fight over the U.N. budget had become entwined with the battle over implementing the broad reforms that world leaders agreed to at a U.N. summit in September. Reaching agreement on the nuts and bolts of the reform programs and how they will be implemented has so far proved divisive and time consuming.

Earlier this month, Bolton called for an interim U.N. budget of three or four months rather than the usual two-year budget so member states would have time to approve and fund management reforms expected early next year.

Several American congressmen have threatened to withhold U.S. dues to the U.N. if reforms are not enacted, which would deal a crippling blow to the world body.

Bolton’s interim budget got no support from other members. Instead, Japan, Canada, Australia and New Zealand came up with a new proposal calling for a two-year budget of $3.8 billion, but imposing a $950 million spending cap for 2006.

Some reforms have already been approved. On Tuesday, a new U.N. Peacebuilding Commission was established to help countries emerging from conflict manage the difficult transition to stability and development. Annan also signed a directive to protect whistleblowers.

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