A majority of UN member states have issued a statement saying that the latest draft of an international treaty to end unregulated arms sales is a "step backwards" from earlier language.

The statement, which is currently circulating at the negotiations in New York and has been signed by 103 countries, calls for the text to be strengthened to "produce a strong and effective treaty, which lives up to the expectations expressed by the overwhelming majority of states".

They have called for ammunition to be brought more fully into the treaty and for it to include gifts, loans and leases, as well as monetary transfers, of weapons between countries. States have also called for the treaty to prevent weapon transfers where there is a "substantial risk" – rather than an "overriding risk", as the draft currently states – of violations of human rights law.

The conference which is shaping the treaty text is chaired by Peter Woolcott, the Australian ambassador to the UN. It is his responsibility to achieve a consensus to get the treat to the floor of the UN on Thursday, or failing that, he can bring the existing text to a vote the following week.

Most European countries, including France and the UK have signed the statement calling for stronger language, while the US, Russia, China and Japan are among those that have not signed.

The UN general assembly voted in December to relaunch negotiations last week on what could become the first global treaty to regulate the world's $70bn trade for all conventional weapons – from naval ships, tanks and attack helicopters to handguns and assault rifles – after a drafting conference in July 2012 collapsed because the United States, then Russia and China, wanted more time.

The US has said it wants a strong, treaty but it is under pressure from the National Rifle Association to block it. The Obama administration has signaled its support for a treaty and underlined that it would not support anything which violates the right to bear arms. The treaty only covers exports between countries and does not affect domestic gun rights.

Campaigners say the latest, second, draft of the treaty has been skewed in favour of the major exporters and falls short of the demands of a majority of member states.

Radical changes need to be made to the UN treaty if it is to save lives, they say.

The campaign group Control Arms said on Monday that the president has failed to listen to calls for a strong treaty made by scores of states.

What has emerged, they say, is a watered-down draft with none of the loopholes resolved. Under the current draft, ammunition is still poorly regulated and, at the heart of the treaty, there is still too high a threshold for exporters to use when considering whether to go ahead with an arms transfer or not.

Anna MacDonald, head of arms control at Oxfam, said it was concerned about "too much talk of consensus, too much talk of very sceptical states who will not sign the treaty".

She said: "The chair of the conference has a stark choice to make. He can side with a handful of countries watering down the text or with the majority representing countless people suffering each day from the unregulated arms trade."

MacDonald said that too high a threshold had been set when assessing the risk that weapons would be used for human rights abuses. She said that almost "every government in the room" wanted it brought down.

"The new text is not good enough and fails to reflect the demands of the majority of the member states. Nearly 120 states called on Mr Woolcott to deliver a robust treaty at the start of the conference, declaring that a weak treaty was worse than no treaty."

The statement, signed by 102 countries on Monday, called for the inclusion of "munitions, ammunitions, parts and components". It said: "We need the provisions on exports' assessments to prevent the authorization of transfers of conventional arms where there is a substantial risk of serious violations of international law, including international human rights law and international humanitarian law, or if those transfers could be diverted to the illicit market and to unauthorized end-users."

It also called for transparent reporting.

Allison Pytlak, campaign manager at Control Arms, said: "At the heart of this treaty is a fundamental flaw. This text could actually fail to prevent arms being provided to human rights abusers who commit torture and extra-judicial killings.

"We have four days of negotiations left now. Fixing this problem must be an absolute priority. Those who use irresponsibly-traded weapons to violate human rights have had it too good for too long. They should be stopped in their tracks by this treaty – not given the green light to carry on with business as usual."

Campaigners also say reporting is a major area of concern and in the current draft, states will be expected to report directly to the UN without making any of their deals public. Transparency is key, they say.