Annan said humanitarian workers and human rights experts needed to be given full access to Darfur to administer aid to hundreds of thousands of people driven from their homes, many into neighbouring Chad.
"They need to get to the victims," he said. "If that is denied, the international community must be prepared to take swift and appropriate action. By action in such situations, I mean a continuum of steps which may include military action."
Annan, speaking in Geneva on the 10th anniversary of the Rwandan genocide, in which 800,000 died, called for a global early warning system to prevent such massacres and criticised UN member states for lacking the political will to act.
Senior UN officials have described the current killing and looting in Darfur, a vast arid region along Sudan's western border with Chad, as a "scorched earth" campaign of ethnic cleansing.
In Khartoum, reacting to Annan, Sudan said it did not need outside military help in its troubled western Darfur region. What is needed is humanitarian aid, Sudanese Foreign Minister Mustafa Usman Ismail said on Wednesday.
"We don't think we need outside military help and we do our best according to the available resources," Ismail told reporters.
Scores of people have been
driven from their homes in Darfur
"All that we want from the international community is that it helps us with more supplies of humanitarian aid so that we can try and help those in need," he said.
Meanwhile, in another speech on Wednesday prepared for delivery, Annan said, "I share the grave concern expressed last week by eight independent experts appointed by this commission at the scale of reported human rights abuses and at the humanitarian crisis unfolding in Darfur, Sudan."
The speech was prepared for delivery to the annual meeting of the 53-nation UN Human Rights Commission.
In Cairo, human rights groups on Wednesday condemned reports of executions and arbitrary arrests in Sudan, linked to an uprising in the remote western Darfur region.
The World Organisation Against Torture (OMCT) said it had received reports that Sudanese military and Arab militia leaders had arrested and executed 168 people from the African Fur tribe.
"Officers from military intelligence and militia leaders (Janjaweed) reportedly arrested 168 people, all belonging to the Fur tribe, and then summarily executed them between 5 and 7 March, 2004, at the security offices in Delaij ... Western Darfur state," the statement said.
"By action in such situations, I mean a continuum of steps which may include military action"
OMCT said it had received its information from the Sudanese Organisation Against Torture (SOAT), a member of its network.
Separately, the Sudanese Human Rights Organisation in Cairo (SHRO) said it was deeply concerned at recent arbitrary arrests of political leaders and Darfurian military personnel.
In a related development, the rebel Sudan People's Liberation Army (SPLA) said it would sign a deal with the Sudanese government by Saturday clearing the last major hurdles to a settlement of their 20-year civil war.
The deal will settle the problem of sharing political and administrative posts between the government and the rebels, as well as resolve the status of the disputed regions of Abyei, Nuba Mountains and Southern Blue Nile, SPLA spokesman Yasir Arman said on Wednesday.
However, he said some technical details would remain before a final settlement was reached.