* U.N. proposes high-level pledging conference for Myanmar
* Ban to send U.N. humanitarian chief to Myanmar
* Thai PM fails to persuade junta to let in aid workers
* U.S. emergency flights to continue for now (Updates with British ambassador, paragraph 9)
By Aung Hla Tun
YANGON, May 14 (Reuters) - The United Nations said on Wednesday up to 2.5 million people might have been affected by the Myanmar cyclone and proposed a high-level donors conference as the Myanmar junta again limited foreign aid.
The European Union's top aid official said the military government's restrictions on foreign aid workers and equipment were increasing the risk of starvation and disease.
U.N. humanitarian affairs chief John Holmes told reporters between 1.6 and 2.5 million people were "severely affected" by Cyclone Nargis and urgently needed aid, up from a previous estimate of at least 1.5 million.
Thai Prime Minister Samak Sundaravej met Myanmar Prime Minister Thein Sein in Yangon and urged him to ease visa rules for relief workers. He said he was told Myanmar could "tackle the problem by themselves."
Myanmar state television raised its official toll to 38,491 dead, 1,403 injured and 27,838 missing.
The International Federation of the Red Cross estimated on the basis of reports from 22 organizations working in Myanmar that between 68,833 and 127,990 people had died.
In New York, U.N. Secretary-General Ban Ki-moon, who has repeatedly expressed frustration over the slow response of Myanmar's reclusive leaders, proposed holding a "high-level pledging conference" to deal with the crisis.
Ban spoke to reporters after meeting with representatives of Myanmar and countries from Asia, Europe and America.
Britain's U.N. ambassador, John Sawers, however, indicated that the high-level conference would be more than a donors' meeting, calling it a "major international meeting" in line with Prime Minister Gordon Brown's calls for a U.N. summit on coordinating aid efforts in Myanmar.
Ban also proposed appointing a joint coordinator from the U.N and the Association of Southeast Asian Nations to oversee aid delivery and said he would soon send Holmes to Myanmar.
Myanmar's U.N. ambassador, Kyaw Tint Swe, said he was pleased that participants had agreed the crisis should not be politicized but must remain a humanitarian issue.
However, Ban, Sawers and U.S. Ambassador Zalmay Khalilzad all said failure to properly handle the crisis would inevitably politicize it.
"The way it will get politicized is if ... assistance is not allowed to arrive in a timely manner to save lives, and no time should be lost," Khalilzad said. "The Myanmar government has a responsibility to ensure lives are saved, not lost."
TRICKLE OF AID
Nearly two weeks after the deadly cyclone swept through the heavily populated Irrawaddy delta, foreign aid was still a trickle.
Myanmar, formerly called Burma, was once the world's biggest rice exporting country, but more than 40 years of military rule have left it impoverished. The military junta has repeatedly crushed pro-democracy movements and tightly restricts visits by foreigners.
Samak told reporters in Bangkok that Myanmar's leaders had insisted that teams of foreign experts, who have been refused entry, were not needed.
"They are confident of dealing with the problem by themselves. There are no outbreaks of diseases, no starvation, no famine. They don't need experts, but are willing to get aid supplies from every country," Samak said.
Louis Michel, the top European Union aid official, disagreed. "There is a risk of water pollution. There is a risk of starvation because the storages of rice have been destroyed," he told reporters in Bangkok.
"We want to convince the authorities of our good faith. We are there for humanitarian reasons," he said. He dismissed suggestions from some European countries that they should bring in aid without awaiting permission from the authorities.
Adm. Timothy Keating, the commander of U.S. forces in the Pacific, also rejected that idea.
He said U.S. emergency aid flights would continue for the time being, despite Myanmar refusing permission for U.S. officials to monitor, or help with, distribution.
A senior U.S. military official in Washington said there were signs aid was stacking up at Yangon airport and said Washington wants to fly choppers to the areas hit worst.
The official said there were reports that some 230 camps had been set up to house more than 230,000 displaced people. "They're springing up all over the place," he said. "The problem they have is a lack of water and sanitary facilities."
Officials said despite reports that some supplies were being stolen or diverted by the army, the humanitarian needs were so great that they would keep making deliveries -- while continuing to urge that U.S. aid workers be granted visas.
World Food Program chief Josette Sheeran said in Washington her organization had so far reached 28,000 people.
"A critical issue now is access," she said. "Our flights are allowed to bring in some supplies, but far from enough - a massive effort is needed to save lives..." she told a U.S. Senate hearing.
Holmes also warned that epidemics of diseases like cholera, malaria and measles "can break out at any time now."
One group of Christian doctors has been treating children in churches, operating below the government's radar. "We have to try to do something," said one of the doctors, giving children diarrhea medicine in a church north of Yangon.
More heavy rain and winds were forecast in the delta as a tropical depression moved in, but the U.N. weather agency discounted fears a new cyclone was forming.
In a gesture to critics, Myanmar's rulers invited 160 personnel from Bangladesh, China, India and Thailand to assist in the relief, but experts said that was a fraction of the number needed. (Additional reporting by Darren Schuettler, Nopporn Wong-Anan, Carmel Crimmins amd Pracha Hariraksapitak in Bangkok; Louis Charbonneau at the United Nations; Susan Cornwell and Missy Ryan in Washington) (Writing by Louis Charbonneau and Jerry Norton; Editing by Alan Elsner) (For more stories on Myanmar cyclone click on [nSP152717] or follow the link to Reuters AlertNet www.alertnet.org)