(Recasts, adds details on Baghdad headquarters)

By Patrick Worsnip

UNITED NATIONS, Aug 17 (Reuters) - Any expansion of the U.N. mission in Iraq will be subject to staff security issues, Secretary-General Ban Ki-moon told a meeting of U.N. employees on Friday to honor colleagues killed there in 2003.

A bomb blast four years ago at the U.N. headquarters in Baghdad's Canal Hotel killed 22 people including the Brazilian mission chief, Sergio Vieira de Mello, often mentioned as a candidate for secretary-general.

More than 150 people were wounded.

This month's Security Council decision to widen the U.N. mandate in Iraq, implying an increase in staff numbers, was an opportunity to carry forward Vieira de Mello's work, said Ban, whose agreement to the plan has drawn fire from some staff.

"Yet I understand the fears and concerns some staff may have about any expansion," he told the commemoration ceremony in the public lobby of the General Assembly building.

"That is why I affirm to you today that any such measure remains strictly subject to conditions on the ground -- your safety is and always will be a paramount concern."

The U.N. Staff Union has called on Ban not to send any more people to Iraq and to withdraw the 50 or so international staff currently living and working in Baghdad's fortified Green Zone government and diplomatic complex.

As part of a plan to accommodate up to 95 staff, Ban has asked for approval of $130 million to fortify the U.N. headquarters there and is expected to request more funds to secure living quarters, struck by a rocket two weeks ago. No one was injured.

U.N. officials say the increasingly sophisticated weaponry of assailants makes the reinforcements necessary.

In an allusion to the dispute, Geraldine Harris of U.N. Radio, who lost a colleague in Baghdad in 2003, told the ceremony, "While risk is part of our work, its minimization must also feature highly on our agendas."

The U.S.-initiated Security Council resolution calls on the world body, whose work in Iraq has been limited mainly to electoral and human rights issues, to promote national reconciliation and dialogue between Iraq and its neighbors.

Ban threw his weight behind that plan at a meeting with U.S. President George W. Bush last month.

A wreath was laid at the ceremony and one minute of silence was observed. U.N. offices in Geneva, Nairobi and elsewhere held similar ceremonies.

Officials have completed an account of the Canal Hotel bombing, which will be shown shortly to families of the victims, U.N. spokeswoman Michele Montas told a regular news briefing. Montas said the United Nations was aware of the possibility of legal proceedings.

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