Annan insisted there is still hope and said the presence of U.N. observers has had a calming effect on the crisis, which has killed at least 9,000 people since March 2011.
"There is a profound concern that the country could otherwise descend into full civil war and the implications of that are frightening," Annan told reporters in Geneva after briefing a closed-door session of the U.N. Security Council in New York by videoconference. The observation mission, he said, "is the only remaining chance to stabilize the country."
Syria has become one of the bloodiest conflicts of the Arab Spring, and world powers have been unable to stop the violence. Syrian President Bashar Assad still has a firm grip on power, and his regime portrays his opponents as terrorists out to weaken the country.
Although the death toll mounts daily, the U.N. has ruled out any military intervention of the type that helped bring down Libya's Moammar Gadhafi, in part out of fears that it could make the conflict worse. Syria is an important geopolitical linchpin with a web of allegiances to powerful forces, including Lebanon's Hezbollah and close ally Iran.
Annan said a civil war in Syria would bleed outside its borders.
"It will not affect only Syria," he said. "It will have an impact on the whole region and this is why we should all be so concerned for the Syrians, for Syria, and for a region that for geopolitical reasons we should all be concerned about."
Annan has led diplomatic efforts to find a political solution to the crisis, promoting a plan that calls for a truce monitored by observers to lead the way to negotiations for a resolution. But his efforts have been troubled from the start. A truce that was to begin on April 12 has never really taken hold. About 60 U.N. observers are currently in Syria and Annan said Tuesday that a full deployment of 300 should be on the ground by the end of the month.
He said even the small number of observers have had an effect so far.
"We've been small in numbers, but even where we've been able to place two or three observers, they've had a calming effect," he said. "And I think that when they are fully deployed and working as a team, establishing relations with the people, we will see much greater impact on the work that they are there to do."
On Tuesday, a cargo jet arrived in Damascus carrying 15 SUVs, computers and telecommunications equipment for the observers, a U.N. official said, speaking on condition of anonymity because he was not authorized to talk to the media. Also on board were dozens of helmets and flak jackets, a sign of the conflict's dangers.
Although the uprising began with mostly peaceful protests, the deadly government crackdown led many opposition supporters to take up arms. Now, the regime is facing an armed insurgency targeting government installations, soldiers and security forces.
Annan called on both sides to stop the violence, not only the government. He appealed to anybody carrying guns to "think of Syria, think of the region," and disarm.
"There have been worrying episodes of violence by the government, but we have also seen attacks against government forces, troops and installations," he said. "And there have been a spate of bombings that are really worrying and I'm sure creates incredible insecurity among the civilian population."
He said there has been "some decrease in the military activities, but there are still serious violations in the cessation of violence that was agreed and the level of violence and abuses are unacceptable." He noted that government troops are still present in and around cities and towns and human rights violations are extensive and may be increasing.
After Annan's briefing, Syria's U.N. Ambassador Bashar Ja'afari said his country was committed to Annan's plan but accused "terrorists" along with members of al-Qaida of murdering civilians and military forces in Syria.
"This is the core issue we are facing right now and what we need to deal with urgently. As far as the Syrian government is concerned, we are still committed to guaranteeing the maximum success of the mission of Mr. Kofi Annan," Ja'afari said.
Earlier Tuesday, Jakob Kellenberger, president of International Committee of the Red Cross, said the conflict is transforming into a guerrilla war with combatants carrying out more ambushes and bombings. He also said 1.5 million Syrians are struggling to meet basic needs for food, water and shelter.
As the country struggles, the regime is pushing a reform agenda that the opposition says is little more than window dressing. On Monday, Syrians voted in parliamentary elections that the government praised as a milestone in promised political reforms. But the opposition boycotted the polls and said they were designed to strengthen Assad's grip on power.
Counting was under way Tuesday, but it was unlikely the election for the 250-member parliament will change the trajectory of the revolt. Parliament is considered a rubber stamp in a country where the president holds the real power.
U.S. State Department spokesman Mark Toner said Monday that balloting in the current atmosphere in Syria "borders on ludicrous."
On Tuesday, Annan acknowledged that his peace plan could fail.
"We may well conclude down the line that it doesn't work and a different tack has to be taken, and that will be a very sad day, and a tough day for the region," he said.
Asked what the next steps will be if his peace plan fails, Annan appeared at a loss.
"As to what else we do," he said, "I think if there are better ideas I'll be the first to jump onto it."
Heilprin reported from Geneva. Associated Press writer Edith M. Lederer contributed to this report from the United Nations.
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