"There's no way we're coming out with a joint statement unless it recognizes there's no joint position," said Maude Barlow, author of the book "Blue Gold" and head of the activist group Council of Canadians.
The World Water Council, which is organizing the World Water Forum, has been strongly criticized by some policy makers and activists for promoting the idea of letting corporations operate municipal and regional water systems.
Activists here view the joint public-private ventures as a flawed solution for getting water to the poor people who need it the most.
The council has included activist groups in the triennial forum, after those groups picketed and protested the previous conference in The Hague in 2000.
But environmental and anti-privatization activists say their inclusion has done little to halt the momentum toward greater corporate participation in the water sector.
The eight-day water forum, which began Sunday in three western Japanese cities, aims to tackle a global water shortage by halving the number of people without access to water by 2015. Some 1.2 billion people lack clean drinking water and 2 billion are without sanitation, according to the United Nations.
News of a possible war in Iraq threatened to disrupt the conference. Five Iraqi delegates left for home Tuesday, after an internationally televised address by U.S. President George W. Bush in which he demanded that Iraqi leader Saddam Hussein surrender power within 48 hours or face a U.S.-led attack.
In Tokyo, Japan's Transport Minister Chikage Ogi said she might cancel her planned appearance at the water conference if war breaks out. Ogi is scheduled to chair the first day of the two-day ministerial meeting ending Saturday, when ministers from 165 nations are to issue a joint agreement on policy.
Conference organizers said they had no plans to call off the meetings.
"What's being discussed here is more important than what's going on in other parts of the world," said William Cosgrove of the World Water Council.
In Osaka, privatizing water was at the heart of a contentious dispute over whether companies such as Suez and Vivendi of France and German energy conglomerate RWE-Thames can help countries run their water utilities more efficiently.
Once held up by water policy-makers as a solution, privatization has become something of a dirty word after a few major failures.
Paul Reiter, executive director of a think tank International Water Association, likened the dispute to a "religious debate" that has been long on ideology but short on counterproposals to improve existing systems.
The two sides remain far apart on the topic.
U.N. agencies, the World Water Council, and other international financial donors stress the need for big spending — around US$180 billion a year — and point to the benefits of public-private cooperation.
In many cities of the developing world, more than half of the water is lost because of leaky pipes or pumps that governments can't afford to repair. Financial markets can make up for the shortfall in public coffers, those organizations say.
But environmentalists and non-governmental organizations contend that water is a basic human right that should be available to all, and say that water should not be part of global trade talks.
They point to the withdrawal of multinational water companies such as Suez of France from Atlanta, Georgia, in January and Bechtel of the United States from Cochabama, Bolivia, in 2000, when Bechtel's doubling of water rates led to a revolt that left seven people dead.
Barlow said utilities charging for services should reinvest profits in cleaning up polluted lakes, expanding water to the poor and building up infrastructure — not paying investors dividends.
Caught in the middle, water companies maintain they are only meeting a demand for their services and that rates are set by regulators or in contracts.
"There is no ideal model," said Richard Aylard of Thames Water, a unit of RWE-Thames.
The reality is that privatization is a bit of a misnomer.
According to the World Bank, 95 percent of countries retain ownership of the water utility. In recent years, many have increasingly turned to companies to handle services, such as collecting bills and managing water distribution, or financing the upgrades to pumps and mains, fixing sewers and building new pipelines.
Eric Gutierrez, a policy strategist with the London-based NGO Water Aid, said discussions overlooked the low-tech, low-cost solutions and better hygiene and sanitation education that have made a difference in African countries, India and other parts of the Third World.