By Chris Baltimore

HOUSTON (Reuters) - A Texan with H1N1 flu died earlier this week, state officials said, only the second death outside Mexico where the epidemic appeared to be waning.

Health officials said the outbreak seemed to be slowing in the country hardest-hit by the virus but the World Health Organization gave a different picture for Europe.

There, the virus was still spreading and WHO laboratories confirmed more infections in Britain, Spain, Italy and Germany -- taking the U.N. agency's toll on Wednesday to 1,516 officially reported cases in 22 countries.

The bulk of these remain in North America.

The WHO confirmed 822 infections and 29 deaths in Mexico, and 403 infections and one death in the United States.

Its tally, which lags national reports but carries more scientific weight, includes a Mexican toddler who died in Texas last week but not the later death of the Texan woman in her 30s who U.S. health officials said had chronic health problems.

They predicted the virus known as swine flu -- actually a mix of pig, human and bird flu elements -- would spread and inevitably kill some people, just like seasonal flu.

U.S. authorities say they have another 700 "probable" cases.

"Those numbers will go up, we anticipate, and unfortunately there are likely to be more hospitalizations and more deaths," U.S. Health and Human Services Secretary Kathleen Sebelius said.

Canada has reported 165 and the WHO said on Wednesday there were 27 cases confirmed in Britain, up from 18.

Spain and Italy both had three more cases, and Germany one more. Guatemala was the 22nd country to confirm a case.

PANDEMIC ALERT REMAINS

For authorities worldwide, the question remained how far the virus would spread and how serious would it be. The WHO remained at alert level 5, meaning a pandemic was imminent.

"If it spreads around the world you will see hundreds of millions of people get infected," said the WHO's Dr. Keiji Fukuda.

If it continues to spread outside the Americas, the WHO would probably move to phase 6, a full pandemic alert. This would prompt countries to activate pandemic plans, distribute antiviral drugs and antibiotics and perhaps advise people to take other precautions like limiting large gatherings.

"It's not so much the number of countries, but whether the virus sets up shop in any of those countries like it has here and starts to spread person to person. And given the number of countries that have cases, one would think that eventually that criteria would be met," said acting CDC director Dr. Richard Besser.

He and Fukuda said it would be important to watch the Southern Hemisphere, where winter and the flu season are just beginning.

Other pandemics have started with a mild new virus in spring that came back to cause severe disease later in the year.

WHO said it would begin sending 2.4 million treatment courses of Roche AG's and Gilead Sciences Inc's Tamiflu, an antiviral proven effective against the new flu, to 72 nations.

CHINESE HEAD HOME

An aircraft carrying 98 Chinese stranded in Mexico by the flu outbreak arrived in Shanghai on Wednesday and all appeared healthy but will have to spend a week in quarantine.

An AeroMexico plane had arrived in Shanghai a day earlier to pick up dozens of Mexicans who had become pawns in a row about how far governments should go to stifle fears of the virus.

None of 43 Mexicans that China had quarantined showed symptoms of H1N1, prompting Mexico to accuse China of discrimination. China denied this, saying isolation was the correct procedure.

(Writing by Maggie Fox and Richard Meares. Additional reporting by Louise Egan, Daniel Trotta, Luis Rojas Mena, Michael O'Boyle and Pascal Fletcher in Mexico City; Laura MacInnis, Stephanie Nebehay in Geneva, Royston Chan in Shanghai; Editing by Angus MacSwan)