The UNCHR said almost half a million Iraqis have fled to other parts of the country in 2006 alone, and that the numbers are expected to grow this year.
It said: "Unremitting violence in Iraq will likely mean continued mass internal and external displacement affecting much of the surrounding region.
"Unremitting violence in Iraq will likely mean continued mass internal and external displacement"
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The agency said about one in eight Iraqis has abandoned their homes, though many of these had fled in the two decades prior to the 2003 US-led invasion.
The emergency funds come on top of the $1bn it requested last month for its global operations in 2007.
It said the money would be used to cover its protection and assistance programmes for Iraqi refugees inside and outside the country, as well as non-Iraqi refugees within Iraq.
The UNHCR said acute poverty was reportedly forcing women into prostitution and leaving refugees and their host communities increasingly vulnerable.
It called for emergency assistance for up to 250,000 people in Iraq.
Guterres said: "The longer this conflict goes on, the more difficult it becomes for the hundreds of thousands of people displaced and the communities that are trying to help them.
"The burden on host communities and governments in the region is enormous."
The agency said that Syria alone is hosting between 500,000 and one million Iraqi refugees, Jordan has taken in up to 700,000, while 20,000 to 80,000 are in Egypt and up to 40,000 in Lebanon.