"We are entering the final stretch of the Montreal marathon," said Stephane Dion, Canada environment minister at the opening of the three-day high-level session of the talks.

"There is an urgent need to send a signal to the world about the future," he said.

Kyoto's first phase, which runs from 2008 to 2012, only covers about 40 wealthy developed nations. Many countries and green groups say the pact will only be effective if all nations, and particularly the biggest polluters, are on board.

But doing so means a huge economic shift for many countries and particularly for rapidly growing developing nations such as India and China, who say cleaning up could limit growth. The developed world should be taking more of a lead, developing nations say.

"This is the most significant economic negotiations the world has embarked on, potentially," said one senior Western government official, who did not want to be identified.

Green groups demand the United States, the source of a quarter of all greenhouse gases, to show more leadership instead of being an obstacle to the talks in Montreal.

BIGGEST POLLUTER

President George W. Bush's administration has pulled out of Kyoto and repeatedly said it is not interested in UN-led talks on climate change in the long-term, seeing them as a prelude to emissions caps threatening industry and jobs.

"We should not start up additional discussions which would confuse our ongoing work," Harlan Watson, head of the US delegation in Montreal, told Reuters on Tuesday.

The United States is the world's biggest polluter.

"Bush agreed in Gleneagles that climate change was urgent," said British environment minister Margaret Beckett, referring to a declaration signed by all G8 leaders at a summit in Scotland in July.

"We are committed to move forward in that forum (Montreal), the global discussion on long-term cooperative action to address climate change," the declaration said.

"The Americans have gone back from what they agreed in Gleneagles," said Jennifer Morgan, climate expert with the WWF environmental group.

On Tuesday, host Canada circulated a draft proposal that sets out a two-year process for discussing long-term measures to tackle climate change, including promoting greener technology, carbon trading and adaptation.

Some environmentalists say this proposal is a timid step but agreement on it would be positive, given the deadlock.

"I don't think it amounts to very much, but if the United States can sign up to that then it will move the process forward," said Catherine Pearce, climate campaigner for Friends of the Earth.

Most scientists say a build-up of heat-trapping gases from fossil fuels burnt in power plants, factories and cars is warming the Earth and could herald catastrophic changes such as a rise in sea levels spurred by melting icecaps.

About 160 members have ratified the Kyoto Protocol, which binds about 40 industrial nations to cut greenhouse gas emissions by 5.2 percent below 1990 levels by 2008-12.