The report on Monday by UN Secretary-General Kofi Annan said close to 2.3 million people were in desperate need of aid, more than a third of an estimated population of six million in Darfur.
But food deliveries in rural areas reached only about 60% of the needy in October due to attacks on convoys. About 22% of children under five are malnourished, while close to half of all families do not have enough food.
"In Darfur, chaos is looming as order is collapsing," Annan said in the report, which the UN Security Council is discussing on Tuesday.
"There has been a continued breakdown in law and order as banditry, looting of livestock and abductions continued."
After years of skirmishes between mainly Arab nomads and mostly non-Arab farmers over scarce resources in arid Darfur, rebels took up arms early last year.
In response, Khartoum used militias, known as Janjawid - accused of burning down homes and raping women - to quell the rebellion.
Khartoum admits arming some militias, but denies links to the Janjawid.
However, the UN report said Sudan had made no move to disarm the Janjawid or arrest its leaders. It said there were increasing allegations, not yet confirmed ,that some elements in Khartoum were continuing to arm the Janjawid.
The report says up to 2.3 million
people desperately need aid
The two main rebel groups - Justice and Equality Movement and the Sudan Liberation Army - have been in talks with Sudan government representatives in Abuja, Nigeria. Those talks led to a ceasefire pact on 9 November, which all sides violated.
The two rebel groups, along with other factions not in the Abuja talks, have initiated attacks on armed Arab tribesmen and police stations in key cities, in an effort to bring world attention to Darfur, the report said.
They are also building political structures within the camps and trying to capture as much land as possible.
Meanwhile, government forces have forcibly evicted some of the homeless from camps, police are ignoring reports of rape of African women and Arab tribesmen are burning villages in West Darfur.
In addition, the Sudanese military is conducting aerial bombings, perhaps without Khartoum's knowledge, the report said.
A key development in November was the Security Council transferring its operations to Kenya, at the instigation of US ambassador John Danforth, to pressure Khartoum and a separate southern opposition into a peace agreement.
UN envoy to Sudan Jan Pronk (C)
is in Kenya to address the issue
The council adopted a resolution that denounced atrocities in Darfur, but was less stringent than previous ones which the report said was noted in Darfur.
Diplomats said the chief government negotiator, Ali Usman Muhammad Taha, would not have attended the meeting if specific sanctions were threatened again.
Annan said the two sides would have trouble completing a north-south pact by 31 December, as they promised the council, unless they received outside help in forging a compromise.
Rebels in Darfur have stepped up
attacks, say diplomats
His special envoy, Jan Pronk, is now in Kenya trying to do that.
"A comprehensive north-south peace agreement could offer a basis for efforts to integrate other marginalised regions of Sudan," Annan said in the report.
Diplomats said rebels in Darfur had stepped up their attacks in the hope of being included in a similar agreement to the one negotiated in Kenya. This involves major political power sharing, integration of the military and a division of oil revenues.
Meanwhile, Sudan on Tuesday ordered the country head of British charity Oxfam to leave as soon as possible for violating visa regulations, a week after threatening to expel him in a separate dispute.
Humanitarian Assistance Minister Ibrahim Mahmud Hamid said Oxfam director Shaun Skelton had a visa only for Darfur, but was working in Khartoum and so had to leave the country.
"They (country directors) have specific immigration requirements, which the head of Oxfam has failed in," the under-secretary for humanitarian affairs, Abd al-Rahman Abu Doam, told a news conference.
"The fast-track visa is for entry to Darfur, to undertake work in Darfur. It does not allow you to work in Khartoum, especially for the head of an organisation," he said.
An Oxfam spokesman declined to comment on the announcement.