In 5 per cent of primaries, leadership remains "unsatisfactory" - a total of 100 schools. Mr Osler singles out heads as the key factor in producing a quality system.
Weaknesses identified in the previous report are still evident, particularly in maths and English language. In writing, overall attainment showed some important weaknesses or was unsatisfactory in nearly half of schools.
Pupils continued to be underchallenged, particularly in S1 and S2, Mr Osler said.
But he added : "Pastoral care is a strength in almost all primary and secondary schools and more schools are promoting an ethos of achievement. A particular success is that school development planning has become an established part of management procedures."
Standards and Quality in Scottish Schools 1995-1998 was based on visits to more than 300 primaries and 130 secondaries. Its main conclusions were:
* Major improvements in primaries have been: very good and good leadership in more schools; increased commitment to self-evaluation and development planning; more schools promoting an ethos of achievement; the management of devolved finances in meeting school priorities.
* Continuing weaknesses in primaries are: attainment in key areas such as writing and aspects of number, money and measurement; poor progression in the curriculum; poor use of homework and other aspects of learning and teaching such as assessment; accommodation in some schools; elements of self-evaluation; and leadership in one in five schools.
* Major improvements in secondaries have been: very good or good leadership in more schools; increased commitment to self-evaluation and development planning; more schools promoting an ethos of achievement; the management of devolved budgets.
* Continuing weaknesses in secondaries are: standards of attainment in S1 and S2; aspects of the curriculum in 20 per cent of schools; provision of religious and moral education; ensuring appropriate expectations of pupils; accommodation in some schools; aspects of self-evaluation; leadership in 15 per cent of schools.