"An outbreak of cholera, affecting probably several hundreds of people, is occurring," warned Fadela Chaib of the U.N. agency, which dispatched a team to the southern city of Basra this week.
Initial cases were seen in children age under 4 from the northern part of the city. Two local hospitals, Al-Tahir Teaching Hospital and Basra Maternal and Child Hospital, have confirmed 17 cases so far.
More samples have been sent to a laboratory in Kuwait for confirmation, and final results are expected by Thursday. No deaths have been reported so far.
Health officials said they feared the problem is already reaching epidemic proportions.
"It's weird seeing 17 confirmed cases. You can expect 10 times more within the larger population," said Dr. Denis Coulombier, an epidemiologist with WHO.
Cholera is a waterborne disease that can be treated if detected. It can be fatal if the victims are malnourished children.
Health experts have been warning of the potential for a large outbreak of cholera, given the shortages of clean water and the lack of sanitation in the southern Iraqi region. Local hospitals have been reporting increasing numbers of patients admitted with diarrhea and other gastrointestinal complaints.
Doctors at Al Tahrir told WHO officials they see 30 patients a day for diarrhoeal disease, while caregivers at the Basra Children's Hospital said of 200 outpatients seen each day, 90 percent are suffering diarrhoeal symptoms.
During the war, Basra's water treatment system was shut down after coalition air strikes damaged the electric grid that powers the water plant.
Residents in the city of 2 million went for several weeks without running water. Many collected their drinking water from Shatt al-Arab river or pilfered water from working pipe lines.
Adding to that, WHO reports sewage is not being disposed of and garbage collection occurs intermittently or not at all.
To relieve the water shortages, British forces and aid agencies have continued to send water tankers through the city and surrounding towns daily. British engineers have succeeded in restoring about 80 percent of the water system, but the lack of security in the city remains a major problem.
In the aftermath of the British takeover, rampant looting and lawlessness raged in the city. The situation has improved, but some looting continues at schools and other public institutions, such as water plants and electric substations, according to U.N. officials.
Though British forces are conducting regular patrols in the city, they don't have the manpower to provide 24-hour guards.
"Not enough is being done," said U.N. humanitarian spokesman David Wimhurst. "Unless it's brought under control, this situation will continue. The end result could be catastrophic."