By David Brunnstrom

DUBLIN (Reuters) - U.S. Secretary of State Hillary Clinton expressed concerns on Thursday about the future of Europe's main democracy watchdog, saying member nations were blocking its work to protect human rights and press freedom.

The Organisation of Security and Cooperation in Europe (OSCE) groups all European countries and former Soviet republics as well as the United States and Canada.

Clinton said the body's principle of decision by consensus had meant it had been possible for some states to block progress on measures on media freedom, freedom of assembly and association, and military transparency.

"I see a growing concern for the future of this organisation and the values it has always championed," Clinton said in a speech at a meeting of the 57-member organisation in Dublin.

"More than 20 years after the end of the Cold War, the work of creating a Europe that is whole, free and at peace remains unfinished," she said.

The OSCE was founded in the 1970s as a forum for communication between eastern and western Europe. Its work includes monitoring elections and attempting to prevent conflicts.

OSCE observers have criticized elections in Russia, Ukraine and other ex-Soviet republics, and the organisation has expressed concerns about the treatment of government opponents in that region.

Moscow is pushing for reform of the body's election monitoring operations, which it says are biased, and has called on it to focus less attention on human rights.

PUTIN CRITICISES OSCE

President Vladimir Putin struck out at the OSCE on Wednesday, telling a meeting of former Soviet states it was "high time for the OSCE to stop serving the interests of certain countries and focus its attention on a unifying agenda".

Clinton said the organisation "must avoid institutional changes that would weaken it and undermine our fundamental commitments", but did not mention Russia's reform agenda.

She accused member states of limiting the participation on non-governmental groups in discussions and of trying to impose greater central control over OSCE offices and field workers in order to curb their work on human rights, an apparent reference to former Soviet states including Russia.

"These are not the way to progress in the 21st century," she said.

Members were undermining military transparency on the continent by suspending the implementation of treaties, she said, in an apparent reference to Russia's suspension of compliance with the Conventional Forces in Europe treaty.

The OSCE's election monitoring operations were dealt a blow on Thursday when the organization's parliamentary assembly said it would no longer work with the its human rights department, the ODIHR.

If the two groups do not cooperate, they could produce conflicting assessments of elections, which could undermine the OSCE's authority.

Under existing rules the ODIHR provides long-term observers for elections, while members of the assembly help monitor the missions on election day and announce the OSCE's verdict.

The parliamentary assembly said ODIHR officials had repeatedly undermined the authority of OSCE missions by giving its opinion of the vote before a final statement had been agreed.

(Additional reporting by Alexei Anishchuk; Editing by Conor Humphries and Pravin Char)