It remains hard for humans to catch but scientists fear it will mutate into a form that passes easily among people. If it does so, millions could die as happened during three flu pandemics in the 20th century.

Japan set out plans on Monday to cope with any outbreak among humans, including declaring a state of emergency, shutting down schools and banning large gatherings.

The Health Ministry estimated that as many as a quarter of Japan's 127 million people could be infected and up to 640,000 could die if the country was gripped by a pandemic.

The disease has so far killed half the people it has infected. Governments are stockpiling anti-viral drugs that are believed to limit the effects of H5N1 if taken early enough.

Swiss drug maker Roche Holding AG confirmed it was in talks with the World Health Organisation (WHO) about creating a reserve of its flu drug Tamiflu for poorer countries to be funded by contributions from developed nations.

Roche defended the drug's safety record after media reports in Japan raised concerns over its possible side effects.

The company has reported the possible suicides of two teenage boys to authorities in Japan but said on Monday there was no clear evidence that Tamiflu had contributed to their deaths.

One teenager died after falling from the window of an apartment block in February while another was killed after walking in front of a truck in February 2004, David Reddy, Roche's head of pandemic sales of Tamiflu, told reporters.

In the case of the boy who fell, there was insufficient evidence to tell whether he had intended to kill himself, Reddy said. The boy had been taking another drug, known to affect the central nervous system, before switching to Tamiflu.

"We do not see an imbalance in these types of neuro-psychiatric events for Tamiflu versus the background associated with influenza," he said. "We have not seen an increased rate (of abnormal behaviour)."

NEW CASES FEARED

There are several other suspected human cases as governments in Asia struggle to control outbreaks in poultry to prevent more people from catching the virus.

Vietnam and China said on Monday they had had more suspected cases in people, while Thailand said a toddler confirmed infected with bird flu was recovering.

In the Indonesian capital, tests confirmed the 20-year-old woman died from H5N1, a Health Ministry official said and that tests were also being conducted on samples from a girl of 13.

Both died over the weekend in the Sulianti Saroso Hospital, Jakarta's hospital for treating bird flu patients. Initial tests on the girl were negative.

Final test results for the woman and a 16-year-old girl who died last week have to be confirmed by a laboratory in Hong Kong.

The laboratory, affiliated with the WHO, has confirmed five people have died of bird flu in Indonesia. But President Susilo Bambang Yudhoyono put the toll higher, telling a news conference on Monday seven of the 11 people who had contracted avian influenza in Indonesia had died.

HIGHLY VIRULENT IN MAMMALS

There are so far 64 confirmed deaths from bird flu since late 2003, including 42 in Vietnam, 13 in Thailand and four in Cambodia. In Vietnam, scientists at the Ho Chi Minh Pasteur Institute who have been studying the genetic make up of H5N1 samples taken from people and poultry said it had undergone several mutations.

"There has been a mutation allowing the virus to (replicate) effectively in mammal tissue and become highly virulent," the institute said on its Web site at www.pasteur-hcm.org.vn.

The WHO said it had not yet seen the detailed results from the Pasteur. It noted that influenza viruses were prone to mutation and that differences had been seen before in genetic sequences of H5N1 strains.