Human Rights First, in a report titled "How to confront the Iraqi refugee crisis: A blueprint for the new administration," said forced migrations and inadequate considerations for the displaced are straining internal and external circumstances.

"The situation for (internally displaced persons) in Iraq is desperate," the group said.

At least 750,000 Iraqi refugees live in squalid conditions in host countries in the Middle East, and another 2.7 million internally displaced face hostile relations with local and government officials.

Host countries give Iraqi refugees moderate hospitality, though most refugees are unable to work or obtain residency documents. Meanwhile, sectarian tensions have erupted at camps in Jordan and Syria, both with sizable refugee populations.

Human Rights First called on U.S. President-elect Barack Obama to work with the Iraqi government of Prime Minister Nouri al-Maliki to improve regional relations and work for general improvements in the refugee situation in the country.

"Such an effort will help hundreds of thousands of Iraqi families preserve their future -- and their country's future -- and will help rehabilitate the U.S. reputation in the region," the group said.