According to the United Nations, 1.1 billion people lack access to clean drinking water, and 2.4 billion have no sanitation.
As the talks continued, United Nations officials expressed optimism over how the meeting is going, following a draft agreement on Tuesday to protect diminishing fish stocks.
Many environmental activists had initially been pessimistic that any real developments would come out of the summit.
A BBC correspondent in Johannesburg, Elizabeth Blunt, says the controversy over sanitation has arisen because it was virtually ignored at the world conference in Rio de Janeiro 10 years ago.
Perhaps wells and piped water are greater vote-winners than lavatories and latrines, she says, but both are equally important to good health.
Vital issues
South African Water Minister Ronnie Kasrils spoke at the conference of his initial bewilderment at an outbreak of cholera at Kwazulu-Natal, despite the fact his government had provided clean water.
He said the realisation that the lack of safe sanitation was the problem had converted him to missionary zeal on this issue.
The UN hopes the summit will agree to double the number of people with access to clean water and sanitation by 2015.
The United States has resisted setting new targets for action, but European Union officials back the sanitation proposals.
"It's important not only that people should be able to get drinking water, but to be able to get rid of waste water," said Danish Environment Minister Hans Christian Schmidt.
Getting worse
The global water situation has deteriorated since the Rio summit 10 years ago, according to experts.
Fish breakthrough
When the summit opened, delegates were largely pessimistic that any lasting agreements could be reached, but according to BBC News Online's correspondent at the summit, Alex Kirby, an agreement over fish stocks on Tuesday night has eased the dour mood.
Delegates agreed to protect the world's oceans and restore depleted fish stocks, "where possible", by 2015.
Activists were generally happy that the summit set a target date, but expressed concern it was too far in the future to fully protect shark, tuna and swordfish communities.
UN officials also say that progress has also been made in talks on trade and finance.
But serious differences remain on many issues. For example, the Americans are resisting pressure for targets on the use of renewable or cleaner energy.
The UN says it hopes an overall draft agreement will be in place before the heads of state arrive at the beginning of next week.