MEXICO CITY - Mexico announced a return to "normalcy" on Monday, preparing to reopen businesses and schools even as the virus sickened more than 1,200 people in 20 countries.

World health officials said the global epidemic is still in its early stages, and that a pandemic could be declared in the days to come. But Mexico's president said it was waning at its epicentre, justifying Wednesday's end to a five-day countrywide shutdown he credits for reducing the spread of the new virus.

Already, streets in the capital seemed more lively, with fewer people wearing face masks and more vehicles. Some cafes even reopened ahead of time. President Felipe Calderon said universities and high schools will reopen on Thursday, and younger schoolchildren should report back to school on May 11.

"The school schedule will resume with the guarantee that our educational institutions are in adequate hygienic condition," promised Calderon, who called on parents to join educators in a "collective" cleansing and inspection of schools nationwide.

"This is about going back to normalcy but with everyone taking better care," Calderon said.

But experts inside Mexico's swine flu crisis centre warned that the virus remains active throughout Mexico and could bounce back once millions return to work and school.

Health Secretary Jose Cordova insisted that swine flu infections are trending downward after 26 deaths at the centre of the epidemic. But other experts said the known cases are almost certainly only a fraction of what's out there, meaning more illnesses could surface once crowds gather again in Mexico.

"It's clear that it's just about everywhere in Mexico. I think now there is considerable person-to-person transmission," said Marc-Alain Widdowson, a medical epidemiologist from the U.S. Centers for Disease Control and Prevention.

"We've seen in many of the cases in Mexico, there's been sometimes five to seven days of being mildly ill with increasing respiratory distress and then being hospitalized, and then spending five days or a week in hospital, so that's a timeline of two weeks," he said.

As of Monday, Mexico had 727 confirmed cases.

Calderon complained that other governments have treated his citizens unfairly, and that punishing countries that report outbreaks sets a bad precedent for future flu control efforts. "If they weaken us economically or in other ways, Mexico will be able to focus much less attention and funds on this problem," Calderon said.

China, Argentina and Cuba are among the countries banning regular flights to and from Mexico, marooning passengers at both ends. Mexico and China both sent chartered flights to each other's countries to collect their citizens. Argentina also charted a flight to bring Argentines home.

Beijing denied that it is discriminating by quarantining Mexicans and any other passengers who came in close contact with them, even those who don't show symptoms.

In a goodwill measure, China sent Mexico the final batch in a US$5 million humanitarian assistance package consisting of masks, gloves, disinfectants, infrared thermal scanners and other items.

The latest figures from Mexico suggest the virus may be less lethal and infectious than originally feared. Only 38 per cent of suspected cases have turned out to be swine flu, and no new deaths have been reported since April 29. But Cordova acknowledged that about 100 early deaths in which swine flu was suspected may never be confirmed because mucous or tissue samples were not collected.

Widdowson, of the CDC, said it's too early to say the outbreak is waning in Mexico, but the signs of progress are clear.

"What we have not seen in Mexico City is a huge, runaway epidemic, and I think that's totally clear. The hospital capacity has not been exceeded. So there hasn't been anything like the kind of picture that people might expect from a severe flu," he said. "I think that gives us optimism."

Good hygiene can be a challenge in Mexico's crowded schools. Some in rural or poverty-stricken areas are dirt-floored, tin-roofed shacks without bathrooms.

Ten-year-old Carolina Arteaga illustrated the problem as she wandered a downtown Mexico City street Monday with the plastic cup she uses to beg money from people outside gleaming office towers. She had no surgical mask, no gloves, and with grubby fingers she eagerly rubbed the few coins people had deposited her cup.

"I forgot it at home," the fourth-grader said when asked why she didn't have her mask.

Carolina will soon be returning to school and says she knows to wash her hands frequently. But since she needs to collect money to help her mother buy food, such instructions probably won't be carried out.