BAGHDAD (Reuters) - More than 1,000 Iraqis were killed in sectarian violence in July, the highest monthly death toll since 2008, the United Nations said on Thursday, as Sunni Islamist groups stepped up their insurgency against Iraq's Shi'ite-led government.

Most of the 1,057 victims were civilians, killed in a relentless campaign of bombings and shootings that some Iraqis fear could drag the country into another war.

"We haven't seen such numbers in more than five years, when the blind rage of sectarian strife that inflicted such deep wounds upon this country was finally abating," Gyorgy Busztin, acting UN envoy to Iraq, said in a statement.

He called on Iraqi leaders to take immediate and decisive action to stop the "senseless bloodshed" and prevent a return to the "dark days" of 2006-07, when the number of people killed per month sometimes exceeded 3,000.

In recent years violence has fallen and a steady rise in oil production has made the country richer, but the conflict in neighboring Syria has inflamed sectarian tensions across the region and invigorated Sunni insurgents in Iraq, including al Qaeda.

July's toll brought the number of people killed in militant attacks since the start of the year to 4,137.

The worst affected governorate was Baghdad, where 238 people were killed in July, followed by Salahuddin, Nineveh, Diyala, Kirkuk and Anbar.

Many of these provinces are dominated by the country's Sunni minority, which deeply resents Shi'ite ascendancy since the U.S.-led invasion that vanquished Saddam Hussein in 2003. Sunnis there have been holding anti-government protests for months.

Iraq's deteriorating security was highlighted last week when hundreds of convicts ran free after simultaneous attacks on two high-security prisons, raising questions about the ability of the security services to combat al Qaeda.

The Islamic State of Iraq and the Levant, which was formed earlier this year in a merger between al Qaeda's affiliates in Iraq and Syria, claimed responsibility for the jail breaks.

(Reporting by Raheem Salman; Writing by Isabel Coles; Editing by Raissa Kasolowsky)