The report said more than half the children interviewed knew of cases of coerced sex and improper sexual touching, and that in many instances children knew of 10 or more such incidents carried out by aid workers or peacekeepers.
In some cases, children as young as 6 years old were abused, the report said.
The study is based on research, confidential interviews and focus groups conducted last year in three places with a substantial international aid presence: southern Sudan, Haiti, and Ivory Coast. The group said it did not produce comprehensive statistics about the scale of abuse but did gather enough information to prove that the problem is severe.
"The report shows sexual abuse has been widely underreported because children are afraid to come forward," Jasmine Whitbread, chief executive of Save the Children UK, told Associated Press Television News. "A tiny proportion of peacekeepers and aid workers are abusing the children they were sent to protect. It ranges from sex for food to coerced sex. It's despicable."
The researchers, who met with 129 girls and 121 boys between the ages of 10 and 17, and also with a number of adults, found an "overwhelming" majority of the people interviewed would never report a case of abuse and had never heard of a case being reported.
The threat of retaliation, and the stigma attached to sex abuse, were powerful deterrents to coming forward, the report said.
Ann Buchanan, director of the Oxford Center for Research into Parenting and Children at the University of Oxford, said the report does not produce comprehensive, statistical data about sexual abuse.
But she said the report does present a useful "pilot work" that outlines the scope of the problem.
"Sexual abuse is a hugely difficult, sensitive area and it's not something that you can usually do surveys about because kids feel terrible shame and are afraid to say what's happened to them," she said. "Given what we know about underreporting of sex abuse, I would say this report is probably true. They've gone about it as sensitively as you can."
Save the Children spokesman Dominic Nutt said U.N. peacekeepers are involved in many abuse cases because they are present throughout the world in such large numbers. But he praised the United Nations for improving its reporting and investigative procedures regarding sex abuse.
"We're not singling out the U.N.," he said. "In some ways they do a good job. It's all peacekeepers and all aid workers, including Save the Children." The report says that several Save the Children workers were fired for having sex with 17-year-old girls in violation of agency guidelines.
U.N. officials in New York said the study shows the effort to combat sexual abuse is falling short.
"The report is deeply disturbing," said Nick Birnback, spokesman for the U.N. Peacekeeping Department. "We in U.N. peacekeeping over the past few years have put a number of measures in place to address this difficult and painful issue. However, obviously, more remains to be done. We are determined to ensure that the secretary-general's policy of zero tolerance of sexual exploitation and abuse by peacekeepers is fully implemented on the ground."
The problem was spotlighted in December 2006, when U.N. Secretary-General Kofi Annan, whose term has since expired, and other high level officials from various agencies promised renewed efforts to curb abuses.
In its report, Save the Children UK makes three key recommendations: establishing a way for people to report abuse locally, creating an international watchdog agency this year to deal with the problem and setting up a program to deal with the underlying causes of child abuse.
Tom Cargill, Africa program manager at London's Chatham House, said there is no "magic bullet" that can solve the problem quickly.
He said the United Nations is beset by a number of bureaucratic and legal problems when it comes to investigating abuses committed by peacekeepers.
"The governance of U.N. missions has always been a problem because soldiers from individual states are only beholden to those states," he said.
"So it's difficult for the U.N. to pursue charges and difficult for the U.N. to investigate them. Information is sketchy but we know there are tremendous abuses in war zones and in complex emergencies."