The flare-up of sectarian violence that saw jihadist-led militants conquer large swathes of Iraq over the past month has displaced 600,000 people and threatens the country's diversity, the UN warned Wednesday.

The head of the UN's refugee agency, Antonio Guterres said that ongoing population movements were alarming.

"The most worrying situation for us is when we see movement of population that tends to destroy the diversity that existed," he told reporters in Baghdad.

A coalition of Sunni militants led by the Islamic State -- a jihadist group whose views and methods are even more extreme than Al Qaeda's -- overran swathes of five Iraqi provinces in an onslaught launched on June 9.

Shiite populations have fled en masse from the area's new rulers and many see little hope of ever returning to their homes.

Simultaneously, many Sunnis in traditionally mixed areas have regrouped, fearing a backlash from militias supporting the Shiite-dominated government.

That process of sectarian separation into religiously homogenous towns and neighbourhoods has been going on, at varying pace, for years but the latest crisis has caused displacement on a huge scale.

Guterres also said such a trend would leave Iraq's minorities -- such as the Turkmen, Christian, Yazidi and Shabak communities -- in a difficult situation.

"I think that one of the risks we have with the present displacement is in the homogenisation of the territory, in which Shiite and Sunni live separately and the minorities have different conditions," he said.

"The preservation of the diversity is an extremely important tool for peace and the future and the reconstruction of the country," Guterres added.

He estimated that 600,000 people had been forced to flee their homes since militants swept into Mosul, Iraq's second city with a population of two million.

Around half a million had been displaced by violence earlier this year in the flashpoint western province of Anbar.

Added to the million people who had fled during previous phases of unrest in Iraq's troubled history, the country's displaced population now tops two million.