The UN will take no immediate action in the troubled Darfur region of western Sudan, Security Council members say.
Pro-government militiamen are accused of holding a town hostage
They said they were monitoring the humanitarian crisis, after being warned by a UN team that atrocities had been committed in the area.
More than a million people have been forced to leave their homes in Darfur after attacks on villages by Sudanese government and militia forces.
Khartoum denies abuses are widespread, and says it is fighting an insurgency.
A report presented to the Security Council on Friday said a there was a "reign of terror" in the region.
Militias prevented food deliveries and stopped anyone leaving, said the report - written by UN officials who had visited the region.
After briefing the council, UN Commissioner for Human Rights Bertrand Ramcharan spoke of a "scorched earth policy" and "repeated crimes against humanity".
He described aerial bombardments as well as systematic attacks on villages by Sudanese government forces and militiamen who killed, raped, and looted.
"This is happening before our very eyes," he said.
Mr Ramcharan condemned the Khartoum authorities.
But the BBC's Susannah Price at UN headquarters says other officials within the organisation have been reluctant to do so.
The US and Britain have called on the Sudanese government to control the militias and protect civilians.
Following the briefing diplomats would only say they would closely monitor developments on the ground.
Sudanese Foreign Minister Mustafa Ismail has acknowledged there might have been human rights violations, but denies a campaign of ethnic cleansing is going on.
Members of the UN team were said to be "visibly shaken" by circumstances in
Refugees first sought shelter in a settlement there, after Arab militias started attacking nearby villages.
The horseback militia known as the janjaweed surrounded the village, effectively holding 1,700 people hostage.
The UN report says that as food began to run out, residents were forced to start paying the militia to leave the village to look for supplies.
The report said the UN believed there were other villages like Kailek in western Sudan, where civilians were living in similar conditions.
Another report released on Friday by the New York-based Human Rights Watch has accused the Sudanese government of ethnic cleansing and crimes against humanity in Darfur.