* Obama says U.S. will back a peaceful Sudan
* Declares first U.S. development policy
* U.S. will focus on economic development, sustainability (Updates with more remarks from speech)
By Alister Bull and Steve Holland
UNITED NATIONS, Sept 22 (Reuters) - President Barack Obama on Wednesday pledged support for a peaceful shift to democracy in Sudan ahead of a January referendum many fear could lead to violence, as he declared a new U.S. approach to development.
Citing a need to break the cycle between development aid and dependence, Obama said that under his new strategy, the United States would partner with nations willing to move forward and he picked Sudan as an example.
"We will reach out to countries making the transition from authoritarianism to democracy, and from war to peace," the president told a summit to measure progress in curbing poverty held at the United Nations.
"As others show the courage to put war behind them -- including, we hope, in Sudan -- the United States will stand with those who seek to build and sustain peace," he told the summit on the Millennium Development Goals to ease poverty.
The Jan. 9 referendum on the independence of south Sudan is likely to split the oil-rich nation in two. Any delay in the vote could re-open a 20-year conflict responsible for 2 million deaths, mostly from hunger and disease.
Obama will also attend a special summit on Sudan on Friday on the sidelines of the U.N. General Assembly meeting.
U.N. officials say the summit is intended to send a strong signal to north and south Sudan that the world is committed to helping Africa's largest country ensure that the secession referendum -- which finalizes the 2005 peace deal which ended decades of war between the two sides -- takes place on time.
"The No. 1 message is that these referendums must go off on time, that they must be peaceful, and they must reflect the will of the people of south Sudan," Samantha Power, White House senior director of multilateral affairs, said on Monday.
The United States says it will gradually improve both economic and diplomatic relations, with the prospect of full normalization, if Khartoum in the North allows the vote to take place, fully implements the 2005 peace deal and resolves the separate conflict in the western region of Darfur.
OBAMA DEBUTS POLICY ON U.S. DEVELOPMENT
The world has set tough U.N. targets to tackle extreme poverty by 2015, and while the strong growth of China and India have lifted living standards for millions of people, progress on other goals like maternal and child health has been slower.
America's first president of African heritage -- his father was Kenyan -- acknowledged progress in the fight against poverty, but said it still fell short of what was needed.
He said the millions of people who have relied on food aid for decades illustrated the risk of creating a dependence that undermined progress, which was "a cycle we need to break".
"We're making it clear that we will partner with countries that are willing to take the lead. Because the days when your development was dictated in foreign capitals must come to an end," Obama said, drawing applause from a U.N. audience which included senior officials from many developing countries.
In a speech that recalled his own experience of growing up in Indonesia, where his mother worked on behalf of the rural poor, Obama said he was declaring an overhaul of the way that the United States applies aid.
"Today, I am announcing our new U.S. Global Development Policy -- the first of its kind by an American administration," Obama said. "Put simply, the United States is changing the way we do business."
The White House said this will mean an increased focus on economic growth and development that would divert U.S. aid to the areas where conditions looked ripest to yield sustainable progress. But the overall scale of U.S. aid was not expected to decline as a result.
"Let me be clear, the United States of America has been, and will remain, the global leader in providing assistance. We will not abandon those who depend on us for life-saving help. Whether it is food or medicine, we will keep our promises and honor our commitments," Obama said. (Additional reporting by Andrew Quinn and Louis Charbonneau; Editing by Stacey Joyce and Cynthia Osterman)
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