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By Louis Charbonneau

UNITED NATIONS (Reuters) - The U.N. General Assembly on Saturday approved a 5 percent decrease in the United Nations' budget for 2012-2013 over the previous two-year period, only the second time in 50 years that the world body has slashed its spending.

U.N. Secretary-General Ban Ki-moon praised the 193-nation General Assembly for reducing costs at a time when governments around the world are cutting expenditures and implementing austerity measures in response to the global financial crisis.

"I am here to thank you for solidifying, with me, our compact to make the most of our resources ... to cut fat ... and to continue fulfilling every one of the critical global mandates entrusted to the United Nations," Ban said in the written text of a speech distributed by his press department.

The deal for a $5.15 billion budget, which compares with $5.41 billion spent in 2010-2011, came after marathon negotiations that ran all night from Friday into Saturday. A deal was not clinched until Saturday morning.

As in past years, the biennial budget negotiations were marked by a tussle between poor countries seeking to raise U.N. development spending and major developed countries - the biggest budget contributors - trying to rein the figures in as they struggle to reduce expenditures in their own national budgets.

U.S. Deputy Ambassador Joe Torsella, who focuses on U.N. management and reform at the U.S. mission, welcomed what he said was "a budget for a strengthened, more efficient, and more effective United Nations."

He said in a statement that the average increase in U.N. biennial budgets over the last two decades has been 5 percent. In 1998 the General Assembly cut the U.N. budget compared to the previous two years, the only other time it had done so in the past 50 years, Torsella said.

The so-called core U.N. budget voted through on Saturday does not include peacekeeping, currently running at over $7 billion a year and approved in separate negotiations, or the costs of several major U.N. agencies funded by voluntary contributions from member states.

Critics of the United Nations, especially in the United States, have long charged that it is a bloated and sometimes corrupt bureaucracy that wastes taxpayers' money.

Supporters of the world body say it is cheap at the price.

Torsella said the new budget would help create a "more effective United Nations that saves the American taxpayers millions of dollars and sets the United Nations on the path of real fiscal discipline and continued reform."

The United States, which pays 22 percent of the U.N. budget, is the biggest financial contributor to the United Nations.

(Editing by Mohammad Zargham)

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