Teachers have condemned the additional pressures stemming from the Scottish Executive policy, introduced two years ago, but Mr Osler defended the aspiration to do more for young people with social, emotional and behavioural difficulties - many of whom feature prominently in the exclusion statistics.
The target would be considered as one aspect of the ministerial review on discipline, he said.
Mr Osler stressed that even the best schools face difficulties and insisted that exclusion was the right option in certain circumstances. "Every exclusion must not be seen as a failure of the process. Exclusion may be the right thing to do at a particular time," he said.
Schools could not solve the world. "There is an important message to teachers that this report is not about finding ways to keep everyone in the classroom. It acknowledges that there are other measures to be used outwith the classroom, outwith the school. But there should not be exclusion from education."
Mr Osler linked the evaluation of projects in 18 local authorities between 1997-2000 with the recent HMI report on the education of looked-after children. Continuity of education was vital and education could give many children with difficulties the stability they lacked elsewhere and opportunities to leave behind their problems for good.
Bill Maxwell, HMI, who carried out the survey on which the exclusions report was based, said: "It is possible for schools and authorities to create a win, win situation in which they can improve order and discipline and meet the needs of pupils with severe emotional difficulties."
Some authorities, notably Stirling and East Renfrewshire, had reduced exclusions substantially. Dr Maxwell accepted that nationally exclusions had risen by 4 per cent since the project was launched and the introduction of the target to reduce exclusions and days lost to truancy by a third.
However, new reporting methods could be the cause. In 999-2000, schools excluded nearly 39,000 pupils. Four authorities had rates of more than 80 exclusions per 1,000 pupils and eight had rates of fewer than 20 per 1,000. The vast majority - 85 per cent - were in secondaries and 81 per cent involved boys.
Commenting on the report, Jack McConnell, Education Minister, said it proved it was possible to find alternatives to long-term exclusion which do not disrupt other pupils.
"While exclusion from school must remain as a last resort to deal with serious breaches of discipline or criminal behaviour, it is vital we channel our efforts towards finding ways to regain the interest of vulnerable and disaffected children and keep them in the system," Mr McConnell said.
Mr Osler insisted the emphasis was on prevention. "As long as there are young people who need to be excluded, there is some way to go."
Leader, page 22
GETTING THE RIGHT BLEND
Schools and local authorities have to "blend" approaches, Bill Maxwell said. These include whole-school strategies, flexible in-school support and more radical out-of-mainstream alternatives.
The more effective teachers were in the classroom, the less likely pupils were to behave badly. They did not misbehave in every class.
* Bannockburn High in Stirling, introduced a "motivation plus" scheme, with rewards and incentives linked to behaviour, attendance, academic progress and study habits.
* A principal teacher in East Renfrewshire has devised a thinking programme for her school's S1 social education course.
* Schools in Possilpark, Glasgow, have devised a curriculum pack on reciprocal skills such as listening and understanding emotions.
* In East Ayrshire, staff focused on circle time to promote personal and social development.
* Some primary 7 pupils in Perth benefit from individual and group support in their transition to secondary.
* One secondary talked about "suspended suspensions", which allow pupils to improve behaviour over an agreed time-scale. Another school gave pre-exclusion warnings.
* All 16 young people in a Galashiels Academy project have an individualised education and care plan.