Over 140,000 Iraqis have fled from parts of Anbar province in the west of the country, since security forces began clashing with al-Qa'ida militants in December.
Peter Kessler, the spokesman from the UN High Commissioner for Refugees, described the situation as “the largest” displacement witnessed in the country since the sectarian violence that took place between 2006 and 2008.
In the past week alone, 65,000 people had fled the conflict in the main Anbar cities of Ramadi and Fallujah, he confirmed.
“This is one of the most difficult situations we have seen in Iraq in a number of years,” he said.
Since December, members of Iraq's al-Qaida branch — known as the Islamic State of Iraq and the Levant — have taken over parts of Ramadi, the capital of the largely Sunni province of Anbar.
They also control the centre of the nearby city of Fallujah.
As the violence intensified, families that abandoned their homes several weeks ago were forced to move again, he said, adding that many of the displaced are in desperate need of food, medical care and other aid.
Some displaced families have ended up in abandoned buildings, schools and half-built houses while others stay with relatives.
Calls to Iraq's Justice Ministry over the report rang unanswered Friday, the start of the weekend in the Muslim world.
International aid agencies appealed to the warring parties on Wednesday to allow humanitarian aid to reach those affected.