"The looming threat of complete lawlessness and anarchy draws nearer, particularly in western Darfur, as warlords, bandits and militia groups grow more aggressive," Annan cautioned in his latest monthly report to the UN Security Council.
Calling a political solution "paramount", Annan noted that "a further deterioration of the situation can be averted only by rapidly consolidating the progress made at the sixth round of talks in Abuja."
The Darfur peace talks in the Nigerian capital, Abuja, are scheduled to resume this week.
Annan said ongoing violence and attacks on villages had caused further displacement of thousands of civilians throughout Darfur, while farmers were continuously being harassed by militia and nomadic groups.
Planted fields were deliberately being destroyed and serious violence against women and girls had continued to be reported on a weekly basis, the report said.
Although the Secretary-General's Darfur report of June 2005 had found a relative decrease in the numbers of deaths due to violence since early 2005, "the months of September and October 2005 have recorded a rise in the number of people killed in the region", it added.
According to an emergency food security and nutrition survey of Darfur undertaken by UN agencies in September, mortality and malnutrition rates had improved since last year.
Annan warned, however, that the situation remained fragile and largely dependent on the delivery of humanitarian assistance.
"If access to affected populations becomes limited, the situation will take a turn for the worse," he said. According to the report, UN access throughout Darfur had decreased to less than 75 percent in October, the lowest level since April 2004.
The Secretary-General urged the parties to the conflict and the international community to coordinate their collective efforts to achieve a successful conclusion to the forthcoming seventh round of the Abuja peace talks.
"This round should be final," Annan said. "It is crucial that a framework peace agreement be concluded before the end of the year."
"The time has come to start concrete planning without any delay to bring to life a peace agreement that may be within the parties' reach," he added. "The people of Darfur deserve not only to achieve peace at the negotiating table as soon as possible but also to rapidly consolidate it through a well planned and well resourced implementation process."
The Darfur conflict erupted in February 2003 when the two main rebel groups, the Sudan Liberation Movement/Army and the Justice and Equality Movement, took up arms to fight what they called the discrimination and oppression of the region by the Sudanese government.
The government is accused of unleashing militia - known as the Janjawid – on civilians in an attempt to quash the rebellion.
According to the UN, some 3.4 million people continue to be affected by the conflict, of whom 1.75 million are internally displaced and 200,000 have fled to neighbouring Chad.