The report found the number of new HIV infections in 2003 totaled 5 million, or about 14,000 people a day -- the highest number ever.
One in five adults in southern Africa is infected with the virus. The proportion of infected people in some countries is staggeringly high, reaching nearly 39% of adults in Botswana and Swaziland.
Worldwide, 34 million to 46 million people are infected, of whom 2.1 million to 2.9 million are children, the report says.
Eastern Europe and Central Asia appear to be emerging as hot spots in the epidemic, according to the report, prepared jointly by the World Health Organization and UNAIDS, the U.N. agency coordinating world efforts against the disease.
Despite this grim picture, Dr. Peter Piot, executive director of UNAIDS, said there were also signs of progress. In some areas, such as the nation of Uganda and the cities of Addis Ababa and Kigali, the capitals, respectively, of Ethiopia and Rwanda, infection rates fell.
"These are, I think, very encouraging indicators," Piot said.
In addition, he said, more political leaders in Africa are speaking publicly about HIV and AIDS than in the past. More people in developing countries also are receiving treatment with life-prolonging antiretroviral drugs.
Last week, for example, the South African government announced that it would provide antiretroviral treatment nationally to HIV-infected South Africans, who number 5 million, more than any other country.
In a campaign known as the "3 by 5" initiative, the WHO intends to increase the number of people receiving medication to 3 million by 2005.
Piot also noted that the money spent fighting HIV and AIDS in developing countries has grown by 50% from last year, to $4.7 billion in 2003.
"That is still half of what is needed to mount an effective response," Piot said. "We are now moving ahead, and the glass is now half full or half empty."
The number of HIV-infected people continues to rise in high-income countries, where infected patients can live many years because of their access to medication.
In the United States, 40,000 new infections occur annually -- disproportionately among African Americans, who make up 12% of the nation's population but account for half of all new infections.
Increasingly, those newly infected are African American women, who largely were infected through heterosexual sex. AIDS is now the leading cause of death among black women ages 25 to 34.
The steady spread of HIV across the globe "was so predictable 10 years ago, 18 years ago, 20 years ago, and it makes me so sad to see this horrible prophecy come true," said Dr. Alexandra Levine, medical director of the USC/Norris Cancer Hospital who chaired the research committee of the Presidential Advisory Council on HIV/AIDS, created by President Clinton in 1995.
Even in this country, Levine said, there has been no decline in rates of new HIV infections -- just a decrease in death rates because of the use of antiretroviral drugs.
The report also found:
* Infection rates are on the rise in China, India, Indonesia and Russia, as well as in regions of Asia and the Pacific where HIV infections had been rare until recently. Most of the cases are acquired through injection drug use and unsafe sex.
* Although Thailand checked the spread of HIV by an aggressive 100% condom use campaign among sex workers, HIV infection is increasing in other sectors of the population.