"We appeal to donors not to give up on their commitment to the Iraqi people and to help pave the way for Iraq's future development," said Christine McNab, humanitarian coordinator for Iraq.
The halt in food aid will affect some 800,000 pregnant and nursing women and malnourished children, as well as up to 960,000 schoolchildren, according to Edward Kallon, the U.N. World Food Program's representative for Iraq.
At the beginning of the year, the U.N. launched the Iraq Humanitarian Action Plan to help the most vulnerable sections of Iraqi society. But six months later, the U.N. has raised only $22.3 million -- or about 12 percent -- of the $187.7 million of new funding the project requires.
Currently the program has $58 million, out of which $36 million is carryover from 2009.
"Unfortunately, due to poor funding, many of the humanitarian activities planned for 2010 have not begun," said a midyear review report of the U.N. released last week in Geneva. "This particularly includes the food, shelter and education sectors."
The world body said the lack of funds means its plan to support 22,500 internally displaced families with emergency shelter will also be suspended.
Since 2008, only about one quarter of the 1.55 million Iraqis who were internally displaced after 2006 have returned home, along with an additional 72,000 Iraqis from refuge abroad, according to the U.N. Refugee Agency.
Some 500,000 internally displaced Iraqis are still residing in public buildings and makeshift settlements, and are still considered most vulnerable. More than 50 percent are in Baghdad and living in poor conditions with severe difficulties in accessing basic services and rights.
Since these settlements are considered illegal by the authorities, residents live under extremely precarious circumstances, including the ongoing threat of eviction, according to the U.N.
"As internal displacement becomes more prolonged, the proportion of IDPs intending to return to their home areas continues to fall," the recent report said, noting that the average monthly rate of return among internally displaced people and refugees between January and May 2010 was 30 percent lower than the same period in 2009.
The U.N also found that bomb attacks and other forms of violence continue to keep the Iraqi population on the edge. The first four months of 2010, for instance, saw a 16 percent increase in civilian casualties compared with the final four months of 2009.