The displacement occurred due to the Taliban insurgency and Pakistan's military response.
The number of internally displaced people worldwide reached 27.1 million in 2009, the highest number since records began in the mid 1990s, said the report.
Out of a total population of 170 million, some three million Pakistanis were newly displaced in 2009, the most in the world and three times more than second-placed Democratic Republic of Congo.
Cause of displacements
"The military operations of governments and armed non-state actors caused most displacement, and many people were displaced more than once," said the report, published by Norwegian Refugee Council, a non-governmental organisation.
"The massive scale of displacement witnessed in countries such as Pakistan is a sad reminder that civilians are the ones who pay the highest price of armed conflict," it added.
In 2008, the biggest new internal displacement of people was in the Philippines, where 600,000 fled fighting between the government and Muslim rebels.
While refugees who cross a country's external border gain rights under international law, internally displaced people (IDP) who have been forced to move due to conflict or hunger have no such rights in many countries.
Rehabilitation rate
Last year also set a new high in the number of IDPs returning home, at around 5 million.
"Most of the people who were newly displaced during the year were able to return after a few weeks or months of displacement," said the report about the Pakistani displacement.
"However, many come back to situations where their homes have been destroyed and are not able to re-establish their lives and livelihoods, or where basic services are not on offer."
Highest number IDPs of all time
The country with the most internally displaced people continues to be Sudan, with 4.9 million or about one in eight of the population, said the report.
The region most affected by internal displacement is Africa, with 11.6 million displaced people in 21 countries, while South and South-East Asia showed the biggest relative increase, of 23 percent to 4.3 million during 2009.
Need for higher engagement
The report said that displaced women and children were at high risk of rape and sexual violence in a number of countries including Chad, Colombia, DRC, India, Iraq, Kenya, Myanmar, Somalia and Sudan.
"The impact of conflict on civilians is brutal," it said. "The international humanitarian community needs to engage much more actively and consistently with non-state armed groups in order to improve our access to populations in conflict zones."
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