The Paris-based aid group Action contre la Faim said it was withdrawing its staff from Iraq due to security concerns, adding that aid activities by US-led forces made it hard for charities to appear impartial.
The group's announcement late last night came just a week after unknown kidnappers seized aid worker Margaret Hassan.
Her employer, aid agency Care International, suspended its work in Iraq after the hostage-taking.
"Like many other organisations, Action contre la Faim is now forced to leave a country in agony - mainly due to permanent insecurity," the group said in a statement.
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The group said it had employed about 10 international staff and 200 Iraqis in the country at one point.