"We cannot stop terrorism or defeat the ideologies of violent extremism when hundreds of millions of young people see a future with no jobs, no hope, and no way ever to catch up to the developed world," she said.
Clinton's speech was prompted by a belief that social and economic conditions need to improve in countries beset by Islamist insurgencies, aides said, citing situations in Afghanistan, Pakistan and Yemen as prime examples.
"We cannot be assured" of promoting a safer, more democratic world "when one-third of humankind live in conditions that offer them little chance of building better lives for themselves or their children," Clinton said.
Aides said Clinton's speech was an elaboration on her goal of giving international development equal weight to diplomacy and defense in US foreign policy.
The federal budget for international aid grew nine percent for 2010 over last year, to some 54 billion dollars for 2010.
It is distributed mainly through the US Agency for International Aid and the Millennium Challenge Corporation (MCC), a government assistance program emphasizing conditions for US-approved governance.
Funds also are targeted for programs such as for AIDS prevention -- 63 billion dollars over the next six years -- and efforts to promote food security, pegged at an initial 3.5 billion dollars.
Clinton said the new development pushed by President Barack Obama was based more on partnership, not patronage.
"In the past, we have sometimes dictated solutions from afar, often missing our mark on the ground," she said, adding that the model emphasized consultation over decree.
"We want partners who have demonstrated a commitment to development by practicing good governance, rooting out corruption, making their own financial contributions to their own development," she said.
Key to US efforts, Clinton added, was a focus on female investment around the world.
"Women and girls are one of the world's greatest untapped resources," she said.
With just one year of schooling, a woman's children are "less likely to die in infancy or suffer from illness or hunger, and more likely to go to school themselves."
Clinton noted the proverb: "'Give a man a fish and he'll eat for a day, but teach a man to fish and he'll eat for a lifetime.' Well, if you teach a woman to fish, she'll feed the whole village."
Carol Lancaster, a former top USAID official, said Clinton's approach may not immediately transform US diplomacy.
But the former first lady "is undoubtedly the most knowledgeable and interested secretary of state ever" for development issues and especially for women and girls, Lancaster said, adding it could prove to be one of her lasting legacies.
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