"The sale of these gems gives Burma's military rulers quick cash to stay in power," said Arvind Ganesan, director of the Business and Human Rights Program at Human Rights Watch in a statement made available in Bangkok.
The call for a complete ban on Burmese gems and jade has coincided with the opening Tuesday of a government-run auction of precious stones in Rangoon, where more than 2,000 buyers have flocked for the bi-annual event.
Burma, the world's largest supplier of rubies and jade, earned an estimated 300 million dollars last year from its gem auctions.
Working conditions at government-controlled gem and jade mines in Burma are notorious for using forced labour and allowing atrocious health conditions, with HIV/AIDs and tuberculosis running rampant among the labourers.
Burma's ruling junta is already under international censure for cracking down on protests led by Buddhist monks last September.
"It is simply unconscionable for traders to help Burma's generals sell off the country's natural resources for their own benefit while average people are victimized and harassed," said Ganesan.
"Trading in Burmese gems bolsters the country's military rulers at a time when they are committing serious human rights abuses, driving their people into further poverty, and rejecting calls for political reconciliation."
In the wake of the September crackdown, the European Union has imposed new sanctions to block the import of Burmese precious and semiprecious stones, and US Congress is considering legislation that would ban the purchase of Burma-mined gemstones, closing a loophole in existing US sanctions that allows gems from Burma to be sold in the US if they have been processed in a third country.
Thailand is the largest importer/processer of Burma gemstones while China is the main importer of Burmese jade.
"Burmese jade, which is popular in China, reportedly is increasingly sought after for use in products commemorating the 2008 Beijing Olympics," said Human Rights Watch.
India is another major importer of Burmese gemstones, which are cut and polished and exported.
"The governments and companies that have stopped buying Burmese gems deserve credit for not supporting human rights abusers," said Ganesan. "The rest have the blood of Burmese on their hands."