* UN investigators issue latest report on war crimes in Syria
* Public executions, lashing in ISIS-held territory
* Syrian govt dropping barrel bombs, some with chlorine
* Extremism is fueling heightened brutality, UN says (Adds U.N. concern over children, quotes)
By Stephanie Nebehay
GENEVA, Aug 27 (Reuters) - The Syrian government and Islamic State insurgents are both committing war crimes and crimes against humanity in their increasingly brutal fight against each other, U.N. investigators said on Wednesday.
Islamic State forces in northern Syria are waging a campaign to instil fear, including amputations, public executions and whippings, they said.
Government forces have dropped barrel bombs on civilian areas, including some believed to contain the chemical agent chlorine in eight incidents in April, and have committed killings, torture and other war crimes that should be prosecuted, they said in a report issued in Geneva.
"Violence has bled over the borders of the Syrian Arab Republic, with extremism fuelling the conflict's heightened brutality," said the 45-page report.
Deaths in custody in Syrian jails are on the rise and forensic analysis of 26,948 photographs allegedly taken from 2011-2013 in government detention centres back its "longstanding findings of systematic torture and deaths of detainees".
"Forced truces, a mark of the government's strategy of siege and bombardment, are often followed by mass arrests of men of fighting age, many of whom disappear," it said.
The U.N. report, the commission of inquiry's eighth since being set up three years ago, is based on 480 interviews and documentary evidence gathered by its team, which is trying to build a case for future criminal prosecution.
Islamic forces, which are also sweeping through neighbouring Iraq in their bid to establish a cross-border caliphate, have drawn more experienced and ideologically motivated foreign fighters and established control over large areas in northern and eastern Syria, particularly oil-rich Deir al-Zor, it said.
"Executions in public spaces have become a common spectacle on Fridays in al Raqqa and ISIS-controlled areas of Aleppo governorate (province)," the report said.
"Children have been present at the executions, which take the form of beheading or shooting in the head at close range... Bodies are placed on public display, often on crucifixes, for up to three days, serving as a warning to local residents."
Paulo Pinheiro, chairman of the U.N. panel, said he was also concerned about the fate of boys forced to join Islamic State training camps, telling reporters the United States should take their presence into account before launching any air strikes.
"Among the most disturbing findings in this report are accounts of large training camps where children, mostly boys from the age of 14, are recruited and trained to fight in the ranks of ISIS along with adults," he told a news briefing.
Islamic State is variously referred to as IS, ISIS or ISIL.
The U.S. air force has already hit the same group across the border in Iraq and President Barack Obama has called for surveillance flights to gather intelligence on Islamic State units in Syria should he decide to order airstrikes there.
"We are aware ... of the presence of children in training camps, I think that this decision by the United States must respect the laws of war and we are concerned about the presence of these children," Pinheiro said.
His panel's report said Islamic State forces had committed torture, murder, acts tantamount to enforced disappearance and forced displacement as part of attacks on civilians in Aleppo and al-Raqqa provinces, amounting to crimes against humanity.
"ISIS poses a clear and present danger to civilians, and particularly minorities, under its control in Syria and in the region," Pinheiro said in a statement.
The investigators, who include former U.N. crimes prosecutor Carla del Ponte, have drawn up four confidential lists of suspects whom they believe should face international justice.
In the report, they reiterated their call for the U.N. Security Council to refer violations in Syria to the prosecutor of the International Criminal Court (ICC).
"Accountability must be part of any future settlement if it is to result in an enduring peace. Too many lives have been lost and shattered," Pinheiro said. (Reporting by Stephanie Nebehay; Editing by Angus MacSwan and Crispian Balmer)