Amnesty International says diamond buyers have continued to trade in the Central African Republic despite the ongoing conflict and an export ban. This could be helping to fuel the violence, it says.
Amnesty called on the CAR government to confiscate millions of dollars worth of diamonds, purchased by traders it says haven't bothered to check whether they might be financing the nation's ongoing conflict.
It says militias responsible for the ongoing sectarian violence could be profiting because of inadequate checks by diamond firms.
Amnesty's report details how Christian and Muslim armed groups profit from the diamond trade by controlling mine sites, and charging "protection" money from miners and traders.
It documents a string of human rights abuses in CAR mines, including labor by children as young as 11 working in hazardous conditions.
Central African Republic was a major exporter of diamonds until May 2013, when the Kimberley Process banned shipment of its rough diamonds. The Kimberley Process is a group of 81 countries, including all the major diamond producers, formed to prevent so-called blood diamonds from funding conflict.
Amnesty has warned huge stockpiles of possible conflict diamonds could end up on the global market when this ban is lifted, which will happen in part once the government meets conditions set in July by the Kimberley Process.
Despite the two-year ban, Amnesty says trade has continued, with thousands of smaller miners selling to traders who sell on to companies in the CAR capital, Bangui.
Amnesty accused two major buying houses, Badica and Sodiam, of purchasing diamonds "without adequately investigating whether they have funded armed groups." Sodiam's 60,000 carat stockpile is worth some $7 million (6.2 million euros), the report said.
In August, the UN imposed sanctions on Badica and its sister company Kardiam for supporting armed conflicts in CAR through illegal trading.
The majority Christian country has been plagued by violence since March 2013, when largely Muslim Seleka rebels ousted the president. The violence has killed thousands and displaced nearly a million people.
The Seleka rebels relinquished power in January 2014. A transitional government, led by interim President Catherine Samba-Panza, has been given the task of organizing elections for this October.