One-third of Iraqis are now living in poverty, according to a new UN study, with 5% in extreme poverty, a sharp deterioration since the 2003 invasion.

Oil riches are not benefiting many of Iraq's people, the UN Development Programme (UNDP) study says.

The report's authors are also highly critical of US-led attempts to try to introduce a market economy quickly.

They single out education, saying things have not improved since the neglect of the Saddam years.

Other indicators show a sharper fall, with half the population having unsatisfactory water supplies and more than 40% deprived of good sanitation.

They say economic shock treatment in recent years has been naive and immature.

South worst

The study is the first major survey of living conditions since the US-led invasion in 2003, and is based on data from 2004.

It was prepared by statisticians at the Iraqi Central Organisation for Statistics and Information Technology.

Conditions before 2003, including Saddam Hussein's rule and international sanctions, have also affected the findings.

From a thriving middle-income economy in the 1970s and 1980s, Iraq has been reduced to a state where one-third of households live on the equivalent of less than $70 a week, the study says.

"A country like Iraq which is blessed ... with the largest potential of natural resources [and] the highest quality of human resources, has been brought to its knees by human hands," said UNDP Iraq director Paolo Lembo.

The worst conditions are shown to be in the south - the area under UK control - that suffered badly in the 1980s in the Iran-Iraq war and was then persecuted by Saddam Hussein.

Towns and cities are said to be three times better off than rural areas.

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