However campaign groups say that the certification process is not rigorous enough to stop armed groups from profiting from diamonds.

When you think that the September 11th attacks cost al-Qaeda merely $500,000, it's scary to think that they've converted $20m into diamonds

Corinna Gilfillan Global Witness

The BBC's Martin Plaut says that diamonds have been to Africa what cocaine has been to Latin America.

They have financed wars, fuelled corruption and brought about the collapse of state institutions.

Thirty-five countries signed the "Kimberley Process" in the Swiss city of Interlaken.

The new system will take effect on 1 January 2003.

"We are glad to announce to you this afternoon that we adopted the Kimberley Process certification scheme which is the outcome of two years' work," South African Energy Minister, Phumzile Mlambo Ngeuka, told reporters.

Easily smuggled

Blood diamonds have helped finance civil wars in countries such as Angola, Democratic Republic of the Congo and Sierra Leone.

Corinna Gilfillan of Global Witness has been campaigning to end the illegal smuggling of diamonds.

Africa's diamonds have brought misery, not riches

She argues that these glittering gems are more than just expensive baubles - they are an easy means of moving finance around the world.

"Diamonds are a very good commodity for doing that because they're so valuable and can easily be transported across borders," she says.

"When you think that the September 11th attacks cost al-Qaeda merely $500,000, it's scary to think that they've converted $20m into diamonds."

She says the new regulations are just a vague code of conduct and will not provide a way of tracking diamonds from the mines to the shops, as intended.

Martin Plaut says that the real question now is whether the diamond industry can adopt a system that really regulates itself, ending its tarnished image in which up to 20% of its trade is in illicit stones.