DAMASCUS, Feb 10 (Reuters) - The United Nations has closed one of two Palestinian refugee camps on the border between Iraq and Syria after finding shelter elsewhere for its 1,300 residents, a UN report said on Wednesday.

The Palestinians started fleeing to what became camps near the Syrian border in 2006 as a result of persecution and attacks on their community in Iraq by mostly Shi'ite militia.

The refugees gathered in areas near al-Tanf and al-Waleed border points, living under what U.N. officials have described as treacherous conditions. Syria refused to allow most of the refugees to reside permanently on their territory, saying other countries of the region, including Israel, should also bear responsibility for them.

A report by the United Nations Higher Commissioner for refugees said Tanf had closed on Feb 1.

Chile and Western countries, including Sweden and Australia, took in around 1,000 of the camp's residents since 2008 and Syria accepted the remaining 300, transferring them to al-Hol, another camp in northwest Syria that has refugees of different nationalities.

Although the living conditions in Syria's Hol camp are slightly better, circumstances are not sustainable for prolonged habitation, the report said.

Al-Waleed, the other camp on the Syrian-Iraqi border, still houses around 1,000 Palestinians and 200 people of other nationalities, according to the UNHCR.

Iraq had 30,000 registered Palestinian refugees before the US-led invasion in 2003 that changed the balance of power in the country in favor of the Shi'ite majority and ushered in a period of sectarian strife.

The refugees had support from the Sunni-dominated government of Saddam Hussein but their fortunes worsened as Shiites gained political clout in the post-Saddam era.

Syria already hosts hundreds of thousands of Iraqi refugees and 430,000 Palestinian refugees registered with the U.N. Relief and Works Agency. Most are descendants of the Palestinians who fled their homeland when Israel was created in 1948.

(Reporting by Khaled Yacoub Oweis; editing by Noah Barkin)