"With the dramatic increase in violence in Sri Lanka, more international monitors are needed, not fewer," said Brad Adams, Asia director at Human Rights Watch.
"The lives of countless civilians are at risk at this critical time.
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Battles between Sri Lanka troops and Tamil Tiger rebels have been on the rise, fuelling fears that a truce will collapse and plunge the nation into full-scale civil war.
The Liberation Tigers of Tamil Eelam (LTTE) demanded that EU nations Denmark, Finland and Sweden pull out of an international truce-monitoring team after the European Union branded the rebels a terrorist organisation.
The three countries will pull out by September 1, leaving only non-EU nations Iceland and Norway as part of the monitoring team.
"By withdrawing their monitors, Denmark, Finland and Sweden will deal a devastating blow to the protection of civilians in Sri Lanka," said Adams.
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"Concerned governments must take urgent steps to get more international monitors on the ground," he said.