Britain is to give £3 million of aid to Iraq as the first step in dealing with the humanitarian consequences of the bloody insurgency by Islamist extremists.
International Development Secretary Justine Greening said the initial tranche of emergency cash would allow agencies to supply water, sanitation, medicine, hygiene kits and basic household items.
Thousands have fled the sweeping advance of fighters from the al Qaida-inspired Islamic State of Iraq and the Levant (Isis) who have taken control of large areas including second city Mosul.
The Department for International Development (DfID) sent in experts yesterday to assess the scale of the crisis and it has
now activated the UK's Rapid Response Facility. "Iraq is facing serious humanitarian need," Greening said.
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"The UK contribution to the international relief response will include initial funding for clean water, medicine and sanitation, as well as support for the UNHCR (the United Nations refugee agency) to provide dedicated safety and welfare teams to protect vulnerable women."
The news came as Iran - a key ally of Nouri al-Maliki's Shia-dominated administration in Baghdad - indicated that it was ready to provide assistance.
Iranian president Hassan Rouhani said his country had "no option but to confront terrorism" and was "ready to provide assistance within international law" if requested.
Hundreds of young Iraqi men are said to be responding to a call from Iraq's top Shia cleric on Iraqis to do their "duty" to fight the insurgency amid reports of atrocities.
UN high commissioner for human rights Navi Pillay issued a warning about reports of war crimes, including summary executions and extrajudicial killings.
Britain and the US are considering what direct help could be given to Baghdad to help it counter the Isis advance but have ruled out any return of ground troops to the country.
US president Barack Obama said he would be considering a range of military options - said to include air strikes - over the coming days.
Foreign Secretary William Hague said the UK Government might offer counter-terrorism expertise.
He has held talks with Turkish foreign minister Ahmet Davutoglu "urgently to co-ordinate approaches to the instability in Iraq and links to Syria conflict", he said on Twitter.
The UK and US insisted it was for Iraq to deal with the issue however, with Mr Obama saying it had to be a "wake-up call" for Iraq's leaders.
Prime minister al-Maliki has been widely criticised for fuelling the sectarian divide in Iraq by openly favouring the majority Shia population at the expense of the Sunnis.
"We can't do it for them and in the absence of this type of political effort, short-term military action, including any assistance we might provide, won't succeed," Obama said.
"So this should be a wake-up call: Iraq's leaders have to demonstrate a willingness to make hard decisions and compromises in order to bring the country together."
Two thirds of the aid money will be used by NGOs in the region to supply clean water and sanitation, essential medicine, women-friendly hygiene kits and basic household items, the DfID said.
The rest would help protect vulnerable girls and women by funding dedicated UN safety and welfare teams to refugee camps.