Warning the country could fall back into chaos if popular grievances were not met, the first ever Afghanistan Human Development Report, released on Monday, acknowledged that progress had been made since 2001 and there was room for "cautious optimism".
But serious security problems remained and the country had some of the world's worst rates of life expectancy, conditions for women and children, and literacy, the UN said.
Unless grievances such as a lack of jobs, health care, education and political participation were addressed, "the fragile nation could easily tumble back into chaos", the United Nations said in a statement in Kabul, accompanying the report.
If that happened, "Afghanistan will collapse into an insecure state, a threat to its own people as well as the international community", it said.
The report, prepared by the UN Development Programme with government participation, said the international backers of President Hamid Karzai's government needed to take a broad and long-term view of Afghanistan's development.
"The international community is committed to fighting terrorism and drugs inside Afghanistan, but human security cannot take a back seat to national and international security interests of other nations," said editor-in-chief Shahrbanou Tadjbakhsh.
"Afghanistan will collapse into an insecure state, a threat to its own people as well as the international community"
Human Development report,
Decades of conflict had taken a devastating toll, leaving Afghanistan near the bottom of the 177 countries covered in the UNDP's human development index, just above Burundi, Mali, Burkina Faso, Niger and Sierra Leone, it said.
Only 28.7% of Afghans over 15 could read and write and life expectancy at birth was just 44.5 years - at least 20 years lower than that in neighbouring states, and six years lower than the global average for least-developed countries.
Conditions for women and children were especially dire, with one in five children dying before the age of five and one woman dying of pregnancy-related illness every 30 minutes.
And while the economy had recovered significantly since the Taliban's overthrow, this had done little to address inequality.
Karzai concedes bleak conditions
One in two Afghans could be classified as poor and the poorest 30% received only 9% of national income.
While millions more Afghans were back at school, the report said the education system remained the "worst in the word", with 80% of schools destroyed or damaged in the years of conflict.
President Karzai, who wrote a foreword to the report, conceded it painted a "gloomy" and "dismal" picture and said Afghans had high expectations of his government to deliver on curbing corruption, on security and reconstruction, and in ensuring the rule of law.
"The government recognises the challenges ahead," he said.