"Germany sees the urgent need for rapid action by the European Union," said a document presented by German Interior Minister Wolfgang Schäuble to EU counterparts at a meeting in Luxembourg on Thursday.
"The European Union should give a clear political signal of solidarity and more active humanitarian assistance towards refugees and receive refugees from the region who have some prospects in Europe," the text said.
About two million people have fled Iraq to Syria, Jordan, Iran, Egypt, Lebanon and Turkey, as well as some European countries, since the US-led war was launched in 2003. Another 2.7 million are internally displaced. A survey for the UN's refugee agency, the UNHCR, in March found that 20 percent of Iraqi refugees survive on less than 100 dollars a month, whilst five months earlier the figure was five percent.
The UNHCR warned last month that it would have to reduce or even suspend programmes to help them due to a funding shortfall.
"With the funds that we have available, we can help many more people," Slovenian Interior Minister Dragutin Mate, whose country holds the EU's rotating presidency, said after the meeting.
He said the EU would focus its efforts on more vulnerable people like women and children, but that no precise numbers had been discussed.
Germany encouraged the 27 EU nations, "in the light of the ongoing widespread insecurity, violence and violation of human rights in Iraq," to help resettle people in need of protection.
"The principle of family unity should be applied as far as possible" in accepting refugees, the document said.
Schäuble said he hoped that an EU-wide agreement could be reached by September at the latest, but a senior interior ministry official did not rule out Germany acting alone should no deal be found.
Six EU countries, mainly Sweden and the Netherlands but not Germany, currently accept Iraqi refugees.
In 2007, 18,559 Iraqis requested asylum in Sweden. In total some 100,000 Iraqis currently live in the Scandinavian country, making it the second-biggest foreign community behind Finns.
The United States, still embroiled in conflict more than five years after it started the war, said Tuesday that it expects to meet the "tall order" of admitting a total of 12,000 Iraqi refugees by the end of this fiscal year. In the last fiscal year, just 3,040 were admitted.