(For full coverage on Pakistan and Afghanistan, double-click on [ID:nAFPAK]) By Jason Subler ISLAMABAD, July 2 (Reuters) - The looming arrival of monsoon rains in Pakistan threatens to bring more misery to the nearly 2 million people displaced by the government's battle with militants in the northwest, U.N. officials said on Thursday. Some 270,000 families have fled their homes since the army began an offensive against Taliban militants in their Swat valley bastion in late April, most of them living with family or friends in "host communities", according to the United Nations. The annual monsoon, which could be stronger than normal this year, might complicate an already challenging situation there and in camps where the remaining 13 percent of internally displaced people (IDPs) are living, said Martin Mogwanja, humanitarian coordinator for the United Nations in Pakistan. The United Nations is working on plans to deal with the possibilities of an accelerated spread of disease and disruptions to the distribution of supplies as a result of the rains, Mogwanja said. "But we will also need possibly additional resources. There maybe have to be some camps or parts of camps that will have to be moved," he said, since most lie in flood-prone parts of North West Frontier Province. One acute threat is that if water supplies are contaminated diarrhoea -- already the biggest health problem in the camps -- could become even more severe, said Eric Laroche, Assistant Director General of Health Action in Crises with the World Health Organisation. "Also, it may lead to a lot of epidemics, and that is a major concern for us," Laroche said. FUNDING CRUNCH Most of Pakistan's political parties and members of the public support the recent offensive, but the government risks seeing that backing evaporate if the displaced are seen to be suffering unduly. Any additional difficulties caused by the monsoon would put pressure on a humanitarian operation that is already struggling to find funding. The United Nations has received $193 million in response to a $543 million aid appeal it launched in May in a bid to avert a long-term humanitarian crisis, Mogwanja said. "The difficulties of funding are real, and in the next four to five weeks to come, we need to have significant additional funding," he said, noting that there was only enough money for food through to the end of this month. Of the $10 million needed for essential drugs through to the end of the year, only $2 million is available, Laroche said. The army says it is near the end of its offensive in Swat and utilities and communications are being restored. The government is expected to announce the beginning of a phased return in coming days. Helping people go home will increase the bill for the relief effort, Mogwanja said. The United Nations has recently sent a team to assess the situation in Buner district, near Swat, and it is working on its strategy for assisting the displaced on their return, Mogwanja said. "That will need additional resources for transport and for assisting with the immediate settlement needs in the areas of return," he said. (Editing by Bill Tarrant)
REFILE - ADDITIONAL CAPTION INFORMATION A man holds a portrait of former Prime Minister Benazir Bhutto for the camera outside Liaquat Bagh in Rawalpindi on July 1, 2009, near the site ...
