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By TERENCE NEILAN

Poor countries must be prepared to carry out far-reaching reforms if they expect to receive increased aid from developed nations, President Bush warned today.

"We must tie greater aid to political and legal and economic reforms," Mr. Bush said in address to the United Nations International Conference on Financing and Development, in Monterrey, Mexico. "And by insisting on reform, we do the work of compassion."

"When nations respect their people, open markets, invest in better health and education, every dollar of aid, every dollar of trade revenue and domestic capital is used more effectively," he said.

"For decades, the success of development aid was measured only in the resources spent, not the results achieved," he said. "Yet pouring money into a failed status quo does little to help the poor and can actually delay the progress of reform. We must accept a higher, more difficult, more promising call."

"When aid is linked to good policy, four times as many people are lifted out of poverty compared to old aid practices."

President Jacques Chirac of France said poor nations seemed to be getting that message.

"The developing countries have committed themselves to promoting economic growth through good governance and greater recourse to private initiative," he said.

For their part, poor nations at the conference drew a direct link between violence and poverty, insisting that more aid was needed since the Sept. 11 attacks on the United States.

"In the wake of Sept. 11, we will forcefully demand that development, peace and security are inseparable," said Han Seung-soo, president of the United Nations General Assembly. He said the world's poorest areas are "the breeding ground for violence and despair."

President Fidel Castro of Cuba, who addressed the conference but left hours before Mr. Bush arrived, criticized the setting of conditions for aid.

"You can't blame this tragedy on the poor countries," he said. "It wasn't they who conquered and looted entire continents for centuries, nor did they establish colonialism, nor did they reintroduce slavery, nor did they create modern imperialism. They were its victims."

President Bush, saying the United States would lead by example, said he had proposed a 50 percent increase in assistance, amounting to billions of dollars, over the next three years. "We should give more of our aid in the form of grants rather than loans that can never be repaid," he said.

The world leaders gathered in Monterrey were expected to approve a proposal today calling on rich nations to increase development aid and for poor nations to use the funds more efficiently. But their pledges will fall far short of of the $100 billion a year the United Nations has said is needed to cut poverty in half by 2015.