At least six children and teens -- the youngest a 12-year-old girl -- and seven young adults have attempted suicide in the past two months, Save the Children said in a statement.
There were almost no cases before the siege started, according to the nongovernmental organization.
"The children are psychologically crushed and tired. When we do activities like singing with them, they don't react at all, they don't laugh like they would normally," a teacher in the western Syrian town is quoted as saying in the report.
"They draw images of children being butchered in the war, or tanks, or the siege and lack of food."
Hundreds of people are "suffering from psychological problems and mental illness, including severe depression and paranoia, often brought on or exacerbated by the conditions they are living in," the statement said. The crisis is worsened
by a lack of mental health resources.
The report comes on the heels of a UNICEF report
, "Uprooted: The growing crisis for refugee and migrant children," which states that almost 50 million children around the world are refugees or migrants.
Madaya, a town of 40,000 people northwest of the capital of Damascus, has been under siege since July last year, cut off by forces of both the Syrian government and Hezbollah, its Lebanese ally. It is also peppered with landmines, thwarting aid efforts.
Alongside mental health issues, children in the town are suffering from a lack of "even basic medical treatment." The NGO adds that there are reports of a serious meningitis outbreak.
"The long siege of Madaya and other towns is taking its toll on people's minds as well as their bodies," said Sonia Khush, Syria director for Save the Children.
"The pressure of living under these conditions for years on end without respite is too much to bear, especially for children. There are more than 250,000 children living under siege in Syria and while they are resilient, we see the signs of trauma and distress every day."
Madaya came to prominence
this year when dozens of residents reportedly died from hunger and malnutrition, according to local activists.
At the time, the United Nations said it had received "credible reports" of people dying of starvation and that Syria had agreed to allow aid convoys into it and other besieged cities.
For a period, aid access was opened up and convoys of food and medicines were allowed to enter. But the siege has tightened again recent months, with no humanitarian relief allowed in since April, according to the NGO.
The use of starvation as a weapon in Syria is "a war crime
," U.N. Secretary-General Ban Ki-moon said in January after U.N. convoys arrived in Syrian towns to deliver food to malnourished residents.
"U.N. teams have witnessed scenes that haunt the soul," Ban said. "The elderly and children, men and women, who were little more than skin and bones: gaunt, severely malnourished, so weak they could barely walk, and utterly desperate for the slightest morsel."
Syria's civil war is not only one of the bloodiest conflicts in the world today, it's also one of the most complicated.
It started as an uprising against President Bashar al-Assad in 2011, and later descended into a civil war that has left 400,000 people dead
, according to the United Nations.