Iran's shelling of Kurdish separatist rebel bases in north Iraq has displaced hundreds of families, a migration group said Monday, voicing fears disease may spread in the camps where they are living.

The International Organisation for Migration (IOM) said it was aware of 884 families that had been displaced along the Iraq-Iran border in Iraq's northern Kurdish province of Arbil, and said the families were being put up in temporary camps.

"The families are living without electricity in the camps and are suffering from a lack of food," it said in a statement. "There is also a fear that disease will spread due to families using nearby streams, which are highly polluted, as their source of water."

"There have been numerous reports that children within the camps are suffering from acute diarrhoea as a result. Thus, the most pressing need for these families is health checks, medicine and water purification kits."

The IOM noted that many of the families displaced had relied on farming to survive, and "were particularly affected by the destruction of their land and livestock by the shelling."

Iran began shelling districts along its border with Iraq in July in a campaign against the Party of Free Life of Kurdistan (PJAK). Tehran accuses authorities in Iraq's autonomous Kurdish region of providing the PJAK with a vast safe haven.

The PJAK, labelled as terrorists by Tehran, has often clashed with Iranian forces, sparking retaliatory bombing of their rear bases in the mountainous border districts of Iraqi Kurdistan.