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 epicenter, justifying Wednesday's end to a five-day nationwide shutdown he credits for reducing the spread of the new virus.

Already, streets in the capital seemed more lively, with more vehicles and fewer people wearing face masks. 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.

A couple embraces as they wear masks as a precaution against A (H1N1) flu in the subway in Mexico City, Monday, May 4, 2009. [Agencies]

"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 A (H1N1) flu crisis center warned that the virus remains active throughout Mexico and could bounce back once millions return to work and school. It also may get worse north of the border.

"The bottom line is that there hasn't been time for the severe illnesses to perhaps show up in the US yet," Marc-Alain Widdowson, a medical epidemiologist from the US Centers for Disease Control and Prevention, told The Associated Press.

Experts in the US also urged caution, even as a New York City school reopened Monday after a spring break trip to Mexico led to as many as 1,000 people being sickened.

"We are by no means out of the woods," said Dr. Richard Besser, acting director of the CDC.

Health Secretary Jose Cordova insisted that A (H1N1) flu infections are trending downward after 27 deaths at the center 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," Widdowson said. And now that the virus is taking off in the US, chances of severe cases could rise as well.

"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, and US case grew to at least 300 in 36 states. Globally, the virus has reached more than 1,276 people in 20 countries -- still in its early stages, to the World Health Organization.

The WHO was studying whether to raise the pandemic alert to 6, its highest level, which would mean a global outbreak has begun. WHO uses the term pandemic to refer to geographic spread rather than severity. Pandemics aren't necessarily deadly. The past two pandemics -- in 1957 and 1968 -- were relatively mild.

"We do not know how long we will have until we move to Phase 6," WHO Director-General Margaret Chan said. "We are not there yet. The criteria will be met when we see in another region outside North America, showing very clear evidence of community-level transmission."

The Southern Hemisphere is particularly at risk. While Africa still hasn't reported any A (H1N1) flu infections and New Zealand is the only country south of the equator with confirmed cases, winter is only weeks away. Experts worry that typical winter flus could combine with A (H1N1) flu, creating a new strain that is more contagious or dangerous.

The latest figures from Mexico suggest the virus may be less lethal and infectious than originally feared. Only 38 percent of suspected cases have turned out to be A (H1N1) flu, and no new deaths have been reported since April 29. But Cordova acknowledged that about 100 early deaths in which the 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 because she needs to collect money to help her mother buy food, such instructions probably won't be carried out.