Others on the U.S. short list reportedly include Randall Tobias, former head of Eli Lilly and the administration's coordinator on AIDS; John Taylor, the top Treasury official for international affairs; and Peter McPherson, president of Michigan State University.

Leadership of the World Bank and International Monetary Fund is decided by all the shareholders in the institutions. But in reality the U.S. and Europe divide up the top jobs, with an American heading the bank and a European running the fund.

The effort to pick the U.S. candidate has been led by the White House National Security Council and the Council of Economic Advisers.

Meanwhile, says the report, the Treasury is leading consultations with other World Bank shareholders.

Asked about Mr Wolfowitz's possible nomination, Rob Nichols, Treasury spokesman, said: "We don't speculate on personnel appointments before they are made."

According to the report, the nomination of Wolfowitz, one of the chief architects of the Iraq war and a former U.S. ambassador to Indonesia, would likely be highly controversial - raising new questions about the process by which the World Bank chief is selected.

One administration official said his nomination "would have enormous repercussions within the development community."

Editor's note: