In his latest monthly report on the conflict in the western Sudanese region, he called it a "deeply disturbing trend" with "devastating effects on the civilian population".
Reports from the ground confirmed the marked deterioration in the situation since September, he said, with confirmed civilian deaths rising from 70 in October to 120 in November.
"Civilians continue to pay an intolerably high price as a result of recurrent fighting by warring parties, the renewal of the scorched earth tactics by militia and massive military action by the government," he said in the report released on 29 December.
"Large-scale attacks against civilians continue, women and girls are being raped by armed groups, yet more villages are being burned, and thousands more are being driven from their homes," he added.
He said militia attacks on villages southwest of Gereida in South Darfur in the beginning of November, which resulted in numerous deaths and the displacement of at least 15,000 people, were a "shocking indication" of the government’s continuing failure to protect its own population.
"The vast majority of armed militia have not been disarmed, and no major steps have been taken by the government to bring to justice or even identify any of the militia leaders or the perpetrators of attacks, contributing to a prevailing climate of impunity," he said.
"I strongly urge the government of the Sudan once again to take decisive steps to address these manifest failures," he added.
Annan said humanitarian agencies and NGOs in Darfur had responded to the sizeable new displacements, but had struggled to maintain their "massive operation" in the face of high levels of insecurity.
He said in October nearly three million people - half the Darfur population - received food aid and countless lives had been saved. Those most exposed to violence and gross violations of human rights, however, continued to live in fear and terror.
Ultimately, only a political solution could bring an end to the violence, he said, adding that the current round of peace talks in the Nigerian capital of Abuja was critical and needed to be decisive.
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 government. The government is accused of unleashing militia - known as the Janjawid - on civilians in an attempt to quash the rebellion.
Some 3.4 million people continue to be affected by the conflict, according to the UN, of whom 1.8 million are internally displaced and 200,000 have fled to neighbouring Chad.