Funding shortage threatens half U.N.'s humanitarian operations in Iraq

ERBIL, Iraq (Reuters) - The United Nations said it would be forced to slash or shut down almost half its aid operations in Iraq without an immediate injection of new funds, at a time when a humanitarian crisis triggered by Islamic State insurgents is intensifying. Lise Grande, the U.N. Humanitarian Coordinator for Iraq, said the number of people in need of assistance continues to increase as the resources to help them dry up, and she forecast a "summer of discontent". A renewed Islamic State offensive in western Iraq has displaced tens of thousands of people over the past month and many more are likely to flee fighting as Iraqi security forces and paramilitary groups act to regain lost ground. "We know that in the next couple of months the humanitarian situation is only going to get worse," Grande told Reuters in an interview on Monday. "Right now our biggest problem is financing: we're running out of money." Emergency kits provided to people fleeing violence are running low, food rations have already been reduced, and 77 health clinics are at risk of being closed by the end of June if no funding comes through, Grande said. "Close to 50 percent of our operations are likely to be curtailed or shut down in the coming months if we don't get money. We are really in trouble." The number of Iraqis in need of humanitarian assistance could reach 10 million by the end of the year, from around 8 million people at present, Grande added. Three million people have been displaced within Iraq since the beginning of last year, and as many as 1.5 million more may be forced from their homes by the end of 2015. It is almost one year since Islamic State militants seized the northern city of Mosul before overrunning around one third of Iraq. Islamic also holds about half of neighboring Syria. "Many of us had hoped the situation would have improved in the past year (and) that we would be in a position where displaced families were headed home," Grande said. "We're not anywhere near that." (Reporting by Isabel Coles; Editing by Mark Heinrich)