The United Nations launched an appeal on Thursday for half a billion dollars in international aid to help tackle a worsening humanitarian crisis in Iraq triggered by the conflict with ISIL.

The United Nations launched an appeal on Thursday for half a billion dollars in international aid to help tackle a worsening humanitarian crisis in Iraq triggered by the conflict with the so-called 'Islamic State of Iraq and the Levant' (ISIL) takfiri group.

Lise Grande, the UN humanitarian coordinator for Iraq, launched the appeal in Brussels, and said the United Nations would be forced to slash or shut down more than half its aid operations in Iraq without an immediate injection of new funds.

The international body said it was asking donors for $497 million to pay for shelter, food and water over the next six months for 5.6 million people displaced or affected by violence between Iraqi government forces and ISIL.

"The crisis in Iraq is one of the most complex and volatile anywhere in the world," Grande said in a statement.

A sharp cutback in the humanitarian aid effort due to lack of funding would have catastrophic implications, she said.

Three million people have been displaced within Iraq since the beginning of last year.

A renewed ISIL offensive in western Iraq has displaced tens of thousands of people over the past month.

In an interview with Reuters in Erbil on Monday, Grande forecast a "summer of discontent".

"We know that in the next couple of months the humanitarian situation is only going to get worse. Right now our biggest problem is financing. We're running out of money," she said.

Emergency kits provided to people fleeing violence are running low, food rations have been reduced, and 77 health clinics are at risk of closing by the end of June if no funding comes through, Grande said.