He urged a meeting of major donors in Kuwait to unite and stay focused on defeating Daesh, which remains “a serious threat to the stability of the region, our homelands and other parts of the globe.”
His warning came amid escalating US-Turkish tensions over northern Syria, and a diplomatic standoff that has pitted Qatar against Saudi Arabia, the UAE, Bahrain and Egypt.
The war against Daesh must remain the priority even though major combat operations are over, Tillerson said.
Having helped with the fighting, countries across the region have a duty to help Iraq rebuild its shattered infrastructure, he added.
“We must continue to clear unexploded remnants of war left behind by Daesh, enable hospitals to reopen, restore water and electricity services, and get boys and girls back in school,” he said.
Representatives of at least 2,300 companies from 70 countries are attending the Kuwait International Conference for the Reconstruction of Iraq, which is due to end on Wednesday. It has been organized by Kuwait, Iraq and the International Monetary Fund (IMF).
The task faced is enormous, with large parts of Iraq left in ruins by almost 15 years of war, dating back to the 2003 US-led invasion and subsequent occupation of the country.
In January 2014, an early incarnation of Daesh captured the city of Fallujah — the first major urban center in Iraq to fall into its hands.
Then in June that year it seized Mosul, followed by Ramadi in May 2015. At the same time, it governed large parts of Syria.
Last December, Iraqi Prime Minister Haider Abadi declared victory over Daesh in his country.
Speaking at the conference in Kuwait, he urged delegates to capitalize on this progress by helping Iraq get back on its feet.
“The return of those who were displaced requires our help to rebuild their homes,” he said. “Today, Iraq stands in rubble.”
But with violence escalating in neighboring Syria, donors have their work cut out. Tillerson said the US will spend $200 million on development projects in Syria, bringing its total contribution to the humanitarian effort there to almost $7.9 billion since the conflict began in 2011.
But with Turkish forces continuing to push into northern Syria to confront US-backed Kurdish militias, Damascus recently shooting down an Israeli warplane over Syrian territory, and Russia and Iran heavily involved in the war, the wider region remains highly volatile.
Tillerson called for an end to the long-running dispute between Saudi Arabia and Qatar, in which Riyadh accuses Doha of supporting extremists and being too close to Iran.