The bank's vice president for South Asia, Praful Patel, said it was "deeply concerned" about a spike in violence that has killed nearly 4,000 people and created tens of thousands of new refugees in Sri Lanka during the past year.
International lenders and donors are meeting in this southern Sri Lankan coastal town for two days to examine the island's economy and study if their cash had been well spent.
Sri Lanka plans to convert 1.5 billion dollars in aid pledges received for this year's development work into firm commitments during the two-day meeting, scheduled to be opened by President Mahinda Rajapakse.
The recent surge in violence is undermining the bank's development projects in the embattled northern and eastern parts of the island.
"There is no choice for Sri Lanka but to pursue peace," Patel told AFP in an interview here.
"It's a tough path, but the path to development and prosperity for Sri Lanka can only be built on a solid commitment to peace and a realisation of that