Insurgent groups and militias in Iraq are recruiting children for attacks, according to a United Nations official, BBC reported.
The findings of the UN special representative for children and armed conflict echo concerns expressed by the US military about insurgent tactics.
In some cases children are paid to carry out attacks, the UN envoy, Radhika Coomaraswamy, told the BBC.
Last month, the US released footage of what it said was al-Qaeda propaganda showing children being trained.
The US says children are being taught how to use guns and carry out kidnappings in addition to other terrorist activities.
Ms Coomaraswamy labelled the practice "intolerable", adding that "their poverty is being exploited".
Speaking to the BBC in the Jordanian capital, Amman, she said: "Some are paid, mainly for mortar attacks and for placing bombs."
She added that the use of children had been going on since 2004 and was a growing problem.
"Many of them no longer go to school, many are recruited for violent activities or detained in custody, they lack access to the most basic services and manifest a wide range of psychological symptoms from the violence in their everyday lives."
She said approximately 1,500 children were also "known to be held in detention facilities".
Ms Coomaraswamy found that only 50% of primary school children were attending school, down from 80% in 2005.
Only 40% have access to clean drinking water and there is a continuing possibility of outbreaks of cholera, she said.
She called on religious, political, military and community leaders to send one clear message to Iraqi children: "Stay out of violence and go back to school."