"Expressions of concern about the situation in Sri Lanka grew in 2007, but international action on human rights was slow and lacked cohesion," the New York-based group said.
The US government's Millennium Challenge Corporation suspended more than 110 million dollars in aid to Sri Lanka due to concerns about the island's human rights situation, HRW said.
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It said Britain had also suspended three million dollars in debt relief citing concerns over human rights and high defence spending to battle separatist Tamil Tiger guerrillas.
More than 1,100 new "disappearances" or abductions were reported in Sri Lanka between January 2006 and June 2007, with the vast majority of victims being Tamils, the watchdog said.
The group has been lobbying Japan, Sri Lanka's largest single