WASHINGTON (Reuters) - The U.S. government should regulate the sale and labeling of tobacco products, according to a commission appointed by then-President Clinton, whose administration lost a court battle over cigarette controls.

In a preliminary report on Friday, the 10-member commission said more needs to be done to prevent the harm caused by tobacco. ``The commission concluded that FDA (Food and Drug Administration should be provided with effective authority over the sale, distribution, labeling, marketing and manufacturing of tobacco products,'' the report said. It also called for the continuation of federal price supports for tobacco as well as assistance to tobacco-dependent areas to develop other lucrative businesses. A final report with specific recommendations was planned for May. Smoking kills more than 400,000 Americans a year and is the leading preventable cause of death in the United States. The commission's suggestions faced an uncertain future. Senator Tom Harkin, Iowa Democrat, said he would try again this year to pass legislation giving FDA authority over tobacco. On March 21, the Supreme Court in a 5-4 vote overturned FDA rules aimed at curbing teen smoking. The justices said Congress had never given the FDA regulatory power over tobacco. Analyst Gary Bullen at North Carolina State University said it was unclear if the Bush Administration would heed proposals from a holdover commission and noted any aid program for tobacco areas would require funding. ``Where's the money coming from to do this?'' he asked. Clinton created the Commission on Improving Economic Opportunity in Communities Dependent on Tobacco Production While Protecting Public Health Sept. 28. Its members were drawn from tobacco growers, public health activists and rural development leaders. Demand for U.S. tobacco has fallen sharply since a landmark 1998 agreement by tobacco firms to curtail advertising and pay $246 billion to states as compensation for the cost of caring for people with smoking-related illnesses. The firms also agreed to pay about $5 billion to tobacco states to ease the transition to other businesses. There are about 90,000 tobacco growers in a dozen states, most with less than 50 acres of the crop. Tennessee, Kentucky, Virginia, North Carolina and South Carolina are the major states. John Ashcroft (news - web sites), nominated by President George W. Bush (news - web sites) for attorney general, has not decided whether to continue a federal lawsuit against tobacco firms over ``ill-gotten'' profits. Initially, the suit also sought to recover billions of dollars spent on smoking-related health care, but a U.S. district court judge ruled last fall that federal law did not allow that.

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