Tamil rebels in Sri Lanka should face travel curbs and other penalties if they keep using children as soldiers, UN Secretary-General Kofi Annan says.
The rebels say underage fighters volunteer
Mr Annan is urging sanctions against the Tamil Tigers and 40 other groups accused of using children in war.
As well as travel bans, his report to the Security Council recommends arms embargoes and financial restrictions.
The child soldiers row has long split the UN and the Tigers. The rebels deny forcibly recruiting children.
They claim underage fighters in their ranks join voluntarily.
Mr Annan disagreed: "The LTTE [Liberation Tigers of Tamil Eelam] has often carried out recruitment by force, abducting children while on their way to school or during religious festivities, and beating families and teachers who resisted the seizure of the children."
He says punitive measures should apply to the parties named in his report "where insufficient or no progress has been made".
Responding to the report, a rebel spokesman told the BBC the Tamil Tigers were working with Unicef and other groups to rehabilitate children in the conflict zone who had volunteered to fight.
Last week the rebels said they were releasing 23 child soldiers, but the UN Children's Fund (Unicef) says it does not know whether the children were among those alleged to have been recruited following the tsunami last December.
Olara Otunnu, Mr Annan's special envoy for children in armed conflict, said this year's annual UN report on children in conflict zones marked a turning point for "transforming words into deeds".
He said the estimated number of child soldiers in the world had fallen to 300,000 from 380,000 in the last 18 months.
"In spite of these advances, the situation for children remains grave and unacceptable on the ground," he told reporters in New York on Wednesday. "The key to overcoming this gulf lies in instituting an international compliance regime."
This would list all offending parties, whether government or rebels.
Mr Annan's report says child soldiers are used in Burma (Myanmar), Burundi, Colombia, Democratic Republic of Congo, Ivory Coast, Nepal, Philippines, Somalia, Sri Lanka, Sudan and Uganda.
Nearly all those accused are rebel groups, but government forces from Congo, Burma and Uganda are also listed.
Also mentioned for the first time in the report are UN peacekeeping forces in Congo, following widespread allegations that troops have been sexually abusing women and children.
The UN Security Council will debate the report on 23 February.