Mr Peters, who met with the heads of the World Food Programme (WFP) and the Food and Agriculture Organisation (FAO) in Rome today, said escalating violence in Iraq had seen a significant rise in the number of displaced Iraqis.
"The UNHCR estimates that over 3.9 million Iraqis have left their homes, with half that number having fled the country, and the situation is predicted to worsen by the end of the year," Mr Peters said.
"The pressure on surrounding countries is also immense. The UN says this is the biggest movement of refugees in the Middle East since 1948, and countries like Syria, Jordan and Lebanon are reaching saturation point.
"New Zealand's contribution, through the government's aid agency NZAID, will help Iraqis displaced within their homeland as well as those who have fled to surrounding states.
"These people clearly need the help of the international community. By channelling our contribution through agencies working within Iraq, such as the UNHCR, we can be sure that our assistance will reach those most affected."
Mr Peters' meeting with new WFP Executive Director Josette Sheeran covered Darfur, Chad, and southern Sudan, and ways to encourage greater coordination between aid and development agencies. The WFP has become an important channel for New Zealand's aid programme in recent years, and NZAID is currently serving a one-year position on its executive board.
Talks with FAO Director General Jacques Diouf were dominated by Pacific development issues such as food safety and security, fisheries protection, and monitoring the impact of climate change.