The situation "may resemble that leading to the 1918 pandemic", which killed more than 40 million people, it said in its latest report on preparedness for an influenza pandemic.
The United Nations health agency -- which fears that the H5N1 bird flu virus could mutate into a deadly human form -- again urged countries and drugs companies to speed development and production of a vaccine.
The death toll in Asia stands at 38 -- 26 in Vietnam and 12 in Thailand -- from the latest outbreak, but so far there are no signs that the virus is being transmitted easily between people, the agency's greatest fear.
But recent epidemiological and laboratory studies revealed unusual features that "suggest that the virus may be evolving in ways that increasingly favour the start of a pandemic", the agency said in a report to its bi-annual executive board, which is meeting this week.
The WHO has forecast a potential death toll of two million to seven million as a "best case scenario" for an outbreak, which it says is overdue. The last one, which claimed between one million and four million lives, was in 1968.
The deadly virus has become "hardier", surviving several days longer in the environment. Evidence also suggested that the virus is expanding its range of mammal hosts, including captive tigers and experimentally-infected domestic cats, it added.
Migratory birds and domestic ducks show no symptoms but excrete the highly pathogenic virus, indicating an "important silent role in maintaining transmission".
RURAL FAMILIES AT RISK
The current concentration of outbreaks of avian influenza in poultry in rural areas, where most households maintain free-ranging flocks, and ducks and chickens mingle freely, was of particular concern, according to the report.
"Such outbreaks may escape detection, are difficult to control and increase the likelihood of human exposures," it said.
It was difficult to give rural farmers and their families -- "the most important risk group" -- realistic advice on how to avoid exposure, the WHO said.
Taken together, changes in the virus and disease had created "multiple opportunities for a pandemic virus to emerge", either through exchange of genetic material between human and avian viruses or through a more gradual process of mutation.
Rapid international spread was certain once a pandemic influenza virus appeared, according to the report.
"Many of the public health interventions that successfully contained SARS (Severe Acute Respiratory Syndrome) will not be effective against a disease that is far more contagious, has a short incubation period, and can be transmitted before the onset of symptoms," it said.
Travel restrictions, quarantines and tracing of cases will be the main tools to protect populations, pending a boost in vaccine supplies, according to the WHO. "Each day gained could mean an additional five million doses of vaccines," it said.