Christian Solidarity Worldwide (CSW) heard first-hand accounts of the killing of unarmed civilians by the Burmese army and instances of torture and abuse
The report was based on interviews with internally displaced people from Kachin State and northern Shah State.
It follows a three-week fact-finding visit to Rangoon and Kachin State on the China-Burma border.
Witnesses also told of rape and the destruction of homes, churches and villages.
CSW concludes in the report that while “a window of opportunity for change in Burma after decades of oppression and conflict may have now opened”, the situation in Kachin and northern Shan States illustrate that “there is still a very long way to go”.
Benedict Rogers, CSW’s East Asia team leader, welcomed the recent release of political prisoners and the decision of Aung San Suu Kyi to contest parliamentary by-elections, saying they were "clear signs of change" in Burma.
He said, however, that the evidence of human rights abuses obtained during CSW's fact-finding visit was "the worst we have ever heard".
"The accounts of torture and other abuses are a cause for very grave concern, and the humanitarian challenges facing the internally displaced people require an urgent and sustained response from the international community," he said.
The violations were documented in a report to coincide with Burma's Union Day yesterday, held each year to mark the anniversary of the Panglong Agreement that granted the Frontier Areas full autonomy in internal administration.
CSW was in Kachin State when the Kachin Independence Organisation held a first round of peace talks with the Government of Burma.
The report goes on to outline the measures that need to be taken to ensure a lasting peace process, including a "genuine inclusive political process" involving all ethnic nationalities, the democracy movement, and the government.
CSW said the process would have to address the desire of the ethnic nationalities for autonomy and equal rights within a federal democratic structure.
Mr Rogers urged the Burmese government to introduce institutional and legislative reforms, including amendments to the constitution, repeal or amendment of unjust laws, and a "sincere effort to begin a political process that results in a mutually acceptable political solution for all the people of Burma".
"The spirit of Panglong was based on equal rights for all the ethnic nationalities, a degree of autonomy, and respect for ethnic identity, within the Union of Burma," he said.
"We urge President Thein Sein to recapture that spirit today, and we call on the international community to develop a balanced response, recognising and encouraging progress while maintaining pressure for real change.”