WASHINGTON, June 8 - Even though the Bush administration has identified failed states for acting as breeding grounds for terrorists, it is doing very little to improve those countries and reduce the risk they pose to national security, according to a report released on Tuesday.

Timed to coincide with the meeting of the Group of 8 industrial nations in Sea Island, Ga., this week, the report, produced by the Commission on Weak States and U.S. National Security, warns that if the United States fails to come up with a new development strategy, it will undermine its national security.

"The underlying premise is we have to act now," said Stuart E. Eizenstat, co-chairman of the commission and the former chief domestic policy advisor for President Carter. The commission included 30 Republicans and Democrats who are experts in development and national security.

This is not the first effort to tie an improvement in development aid to national security threats. But since the attacks of Sept. 11, 2001, the administration has moved in different directions on development aid, said the report, commissioned by the Center for Global Development, a Washington nonprofit institute.

Rather than focus development aid on failed states, it has created a new development account to help qualified poor nations with a proven track record for fighting corruption and supporting democracy. Failed states - those that generally cannot provide security for their citizens or their territory, and that are corrupt and illegitimate in the eyes of their citizens - are not eligible for this aid.

In this year's budget, the administration has asked for an increase of more than $1 billion for H.I.V./AIDS and assistance to the poorest nations, while it has requested a $21 billion increase for the Defense Department, not including supplemental requests for military operations in Iraq.

That gap exemplifies the commission's fears that the administration and Congress rely too heavily on military force and not enough on development aid to fight terrorism.

The commission recommended that a new cabinet-level secretary of development be appointed to coordinate development efforts.

While saying that there should be far more attention and resources for countries on the brink of collapse, the group resisted putting a price tag on what was needed. But the report noted that the United States was one of "the least generous of all donors in its public spending on development assistance as a proportion of the economy."

The report also reiterated several traditional development remedies, including better trade opportunities for poor nations and more debt relief.

Over all, the report said that current aid policy is better suited to fighting the cold war than to the battle against networks of terrorists without armies or national capitals.

"It is the weakness of our enemies that is the threat today, not their strengths," said Nancy Birdsall, president of the Center for Global Development.