Urea is polar, but not very large as organic molecules go—MW of only 60. Provided that the nitrogens are not protonated, which at physiologic pH they are not, urea can cross the membrane by passive diffusion; not so quickly as water, but the transfer rate is much faster than, say, glucose (MW of 180) which requires some form of facilitative transport to get across a cell membrane. 1.8% urea (ca. 0.3M urea) is isosmotic with plasma (as is 0.9% NaCl, or 5% glucose). A 0.28M solution of urea must be just hypotonic enough for water to flow into and lyse the RBCs. 1M urea should be hypertonic. The RBCs should shrivel up as water is driven out of the cells and they may not lyse at all.

The issue here is whether the concentration of urea is less (=hypotonic) or greater (=hypertonic) than the isotonic or isosmotic concentration of urea.

I realize I am a few years late, but I see a lot of misinformation on this topic on the web, so I think it is important. Red blood cells have a lot of urea transporters and a lot of aquaporins (water channels). That is how urea and water get into the red blood cell. It is not the urea itself going into the cell that is causing the cell to lyse. It is water going into the cell that is causing the cell to lyse. What happens? When you put a cell into an isoosmotic solution of urea and water, urea will be transported into the cell until the concentration of urea on the two sides of the membrane is the same (facilitated diffusion). But now the osmolarity of the intracellular solution is higher than the osmolarity of the extracellular solution. Water will go and find the osmoles. Water will cross into the cell until the osmolarity is the same inside and outside the cell. The cell will swell and lyse. If you put the red blood cell into a more dilute urea solution, say one that has half the number of osmoles as normal solution, about 150 mosmole/L, water will immediately start going into the cell because the osmolarity inside the cell is greater than outside the cell. There is no waiting for urea to be transported into the cell. The cell will quickly swell and lyse. What about if the cell is sitting in isotonic saline and you sprinkle particles of urea into the extracellular solution? At first the cell may begin to shrink as water comes out, but given a few seconds, the cell will go back to its original size. The urea concentration on the two sides of the membrane will be the same. Because the urea itself could equilibrate across the membrane, there was no reason in the end for water to have left the cell.