Yet only 7 million of them are recognised as refugees, because the majority don't leave their countries. "Unlike refugees, they have not made it to the relative safety of another country, and are largely forgotten by the outside world," says the report, War Brought Us Here.
In Kosovo last year, for instance, more than 400,000 children fled their homes during the Nato bombing, many of them forced out by attacks from Serbian soldiers and paramilitaries. But though nearly all of the refugees have returned, 135,000 children are still internally displaced because their homes or villages were destroyed.
In some conflicts, the impact of war on children's lives hits the newspaper headlines, as in the case of Sierre Leone, where thousands of children have been killed, raped or mutilated.
But there are other, untold effects of war, which remain long after the conflict has ended and the journalists have left. In Sierre Leone, two-thirds of the population have been displaced and basic services such as health and education have broken down. During the war, which erupted again last month after a short-lived peace, 70 per cent of children were not attending school.
Aid-donating countries often take a tough line on giving money to governments fighting a civil war, for fear of funds being siphoned off to buy arms or simply because their investment is likely to be destroyed in the fighting.
But the dangers involved in attempting to escape a battle zone and the health risks of living in tents or makeshift shelters - often with no sanitation or heating - bring long-term problems.
At a crucial, formative time in children's lives, the security of family life is shattered. They may be separated from parent in the chaos of fleeing or through violent death, and the trauma of what they have seen can damage their development - many children become withdrawn, stop talking or playing, or become obsessed with war games or plotting revenge (witness the drawings opposite by Chechen children).
In a poor country, the chance of a few years of education may have been taken away forever. With schools destroyed or regions unable to cope with the influx of displaced people, children may never get a second chance. Often they cannot enrol because they have lost crucial documents such as birth certificates, or because their parents, having lost everything, need them to work.
In an unstable, violent environment, children are also at far greater risk of sexual abuse, rape or coercion into providing sexual services, whether by armed groups who have taken over their village or by adults simply taking advantage of the breakdown in law and order.
Save the Children is campaigning for governments, armed groups and the United Nations to:
* grant and accept international assistance to displaced children in need of protection;
* end impunity for those guilty of violating the rights of displaced children;
* stop recruitment of displaced children into armed forces;
* ensure adequate resources are given to protect displaced children before and after their displacement, including addressing their long-term developmental needs, such as education.
"Children's rights have no borders, providing protection is a global responsibility," says the Save the Children report. "Yet governments, armed opposition groups and the international community are persistently failing to protect them."
War Brought Us Here: protecting chidren displaced within their own countries by conflict is on the Save the Children website at www.savethechildren.org.uk functionsindx_search.html