The Washington-based development lender said preliminary data showed developing countries as a group reached the goal - the first of eight U.N. Millennium Development Goals - in 2010.

The goals are a set of targets adopted by world leaders at the United Nations in 2000 to fight poverty, hunger and disease in poor countries.

The progress is mainly due to China's rapid economic rise, which has helped to lift many of its people out of poverty. Excluding China, however, the number of people in the developing world living in extreme poverty was about the same in 2008 as in 1981 at around 1.1 billion, the World Bank said.

"We are now confident that the developing world as a whole has reached the first of the Millennium Goals and reached that goal in 2010 despite the crisis," said Martin Ravallion, director of the World Bank's research group and lead author of the report.

A breakdown by region, however, shows that just Eastern Europe, the Middle East, and East Asia and the Pacific - which includes India and China - achieved the poverty goal. Africa and Latin America are not there yet, the World Bank said.

At the current rate, the World Bank estimates that by 2015 there will still be about 1 billion people living in extreme poverty, internationally defined as those living on less than $1.25 a day.

The new World Bank data, drawn from 850 household surveys in 130 developing countries, show that the proportion of people living in extreme poverty is now at its lowest since 1981, when the institution began monitoring poverty levels.

The Bank reckons some 1.29 billion people lived on less than

$1.25 a day in developing countries in 2008, down from 1.94 billion in 1981.

"This is the first time we have seen falling numbers of poor in all six regions, including sub-Saharan Africa," said Ravallion.

Still, developing nations have made less progress when it comes to cutting the number of people living between $1.25 a day and $2 a day. World Bank estimates show that 1.18 billion people lived just above the $1.25 a day line in 2008 up from 648 million in 1981.

MANY STILL CAUGHT IN POVERTY TRAP

Ravallion said it was a mystery why so many people were "bunched up" just above the $1.25 a day yardstick, unable to lift themselves above $2 a day.

"Having 22 percent of people in developing countries still living on less than $1.25 a day and 43 percent with less than $2 a day is intolerable," said Jaime Saavedra, director of the World Bank's Poverty Reduction and Equity Group.

While the poor have benefited from higher growth in developing countries, many are still mired in a poverty trap due to a lack of jobs, and basic health and education services.

In China, World Bank data shows there were 660 million fewer people living under $1.25 a day in 2008 than in 1981.

In Africa, for the first time since 1981 less than half the population now lives below $1.25 a day, the World Bank said. It estimated that the extreme poverty rate in Africa has fallen almost 10 percentage points since 1999, with 9 million fewer people living below the poverty line in 2008 than in 2005.

Ravallion said Africa would need substantially higher rates of growth than China to bring down the number of poor.

"It is going to be harder for Africa to achieve anything like the rates of poverty reduction in East Asia because conditions are not as favorable," he said, adding that progress in Africa to cut poverty was nonetheless encouraging.

In the Middle East and North Africa, where "Arab Spring" protests against poverty and corruption have toppled leaders in Tunisia, Egypt and Libya, some 8.6 million people lived on less than $1.25 a day in 2008, down from 10.5 million in 2005 and 16.5 million in 1981, the World Bank said.

In Latin America, where poverty rose until 2002, numbers have since been falling. The Bank said the number of people living under $1.25 a day in the region fell to 6.5 percent in 2008, its lowest so far, from a peak of 14 percent in 1984.

(Editing by Christopher Wilson)

• A Permanent Economic Emergency