The UN Security Council had adopted a resolution last Friday threatening sanctions on Sudan if it did not disarm and prosecute Janjawid militia.
Jan Pronk, Annan's special representative to Sudan, said there had been some confusion in Khartoum about the 30-day deadline given in the resolution.
"They certainly will be able to meet the 30-day deadline to report substantial progress. That is what the Security Council asked," he told BBC television. "There was some misunderstanding here in Khartoum that the council asked for a full solution of the conflict (in that period). That is impossible."
Pronk said it was unrealistic to expect the government to solve the crisis in 30 days since it did not control the rebel groups who launched an uprising in early 2003, and did not fully control all Janjawid militia in the conflict.
Asked what evidence there was that Khartoum was complying with the UN resolution, Pronk said: "They have deployed many more policemen in the region and they have stopped their own military activities against villages.
"They have lifted all restrictions on humanitarian assistance. At the same time they have also declared, and I think they are right, that they cannot deal with the problem in 30 days."
Pronk said security in the refugee camps had also improved, although human rights violations in the countryside continued.
On Tuesday, the UN envoy for internally displaced persons, Francis Deng, said people remained afraid to return to their homes because of continued Janjawid attacks. Khartoum, he said, was pressuring them to return before it was safe to do so.
More AU troops
In a related development, the African Union has said it plans to boost the number of troops in Darfur to 2,000 from 300.
The initiative, which was discussed and put forward by ministers in the AU's 15-member Peace and Security Council that includes Sudan, now awaits the signature of South African President Thabo Mbeki, a spokesman said on Wednesday.
More aid is on its way for refugees
in camps across Darfur
Mbeki holds the body's rotating chairmanship for August and is set to chair a meeting this month at which he will be expected to sign it.
The proposal was also discussed at the 53-member AU summit in Addis Ababa last month. It would also aim to broaden the original mandate of the AU force to include a peacekeeping role as well as protecting truce monitors in Darfur.
WFP sends aid plane
Meanwhile, the first of 16 UN World Food Programme flights carrying aid to several points in Darfur region of Sudan took off Wednesday from Brindisi in southern Italy.
The flights, initially set at 12, were also boosted to 16 "and we have not ruled out adding more," said Marta Laurienzo, an official at the UN humanitarian intervention base located at the Pierozzi military airport in Brindisi.
The aircraft will be carrying $2million worth of pre-fabricated offices, generators, water purification equipment and chemical toilets to help aid workers on the scene set up shop.