"The UN refugee agency reported that up to 10,000 people from the Christian majority town of Qaraqosh, fled earlier this week," Xinhua quoted UN spokesperson Stephane Dujarric as saying.
The town is located 30 km south-east of Iraq's second largest city of Mosul, where militant groups gained control June 10.
As many as 500,000 people have reportedly fled from Mosul since then. "Many of them have fled to Iraq's Kurdistan region," Dujarric said.
"Together with the Kurdish authorities and other humanitarian partners, UNHCR has helped to expand the Garmawa camp in Dohok where more than 1,000 displaced people are now staying," he said.
The spokesman noted that the UNHCR and its partners have also distributed tents, mattresses and hygiene kits at schools and community centres in Erbil where the displaced families are sheltering.
"The camps need about $64.2 million for shelter and protection services but has only received eight percent of the funding so far," Dujarric said.
According to the UNHCR, an estimated 1.2 million Iraqis have been displaced this year due to the ongoing crisis.