The UN believes 10,000 civilians have been killed or injured in two months
Actions by Sri Lanka's government and the Tamil Tiger rebels may amount to war crimes, the United Nations says.
UN High Commissioner of Human Rights Navi Pillay called on the two warring sides to suspend hostilities immediately in the island's north-east.
Describing the level of civilian deaths as "truly shocking", she warned it could reach "catastrophic" levels.
The government said it was "very disappointed" at the UN commissioner's "unprofessional statement".
There was no immediate reaction from the rebels.
US Secretary of State Hillary Clinton told Sri Lanka's President, Mahinda Rajapaksa, by telephone that Washington was deeply concerned about deteriorating conditions and increasing loss of life in government-designated safe areas.
The army has pressed the rebels into a shrinking area amid heavy fighting, saying it is engaged in a final offensive to capture the last Tamil Tiger strongholds.
'Thousands dead or injured'
This is the UN's strongest message on the conflict so far, BBC Sri Lanka correspondent Anbarasan Ethirajan reports.
Government troops believe they are close to crushing the rebels
"Certain actions being undertaken by the Sri Lankan military and by the LTTE [Tigers] may constitute violations of international human rights and humanitarian law," said Ms Pillay.
She accused government forces of repeatedly shelling safe zones set up to protect civilians.
Tamil Tigers, she said, had reportedly held civilians as human shields and fired on those who tried to flee.
"The brutal and inhuman treatment of civilians by the LTTE is utterly reprehensible and should be examined to see if it constitutes war crimes," she continued.
According to what the UN called credible sources, more than 2,800 civilians may have been killed and 7,000 others wounded in the fighting over the last two months.
Hundreds of children are believed to have died, Ms Pillay said, and more than a thousand have been injured.
The Sri Lankan minister for human rights, Mahinda Samarasinghe, said the government was surprised at the UN using what he called unsubstantiated figures about civilian casualties.
"We have very clearly stated that we have not at any time fired at the no-fire zone," he added.
"We are very disappointed and we are very surprised that this kind of unprofessional statement has been issued."
While there was no immediate response top the UN report from the Tigers, pro-rebel news website TamilNet accused government forces of killing 30 civilians and wounding 60 inside safe zones on Thursday alone.
The assertions could not be verified independently.
The Tigers, who are proscribed as a terrorist group in many countries, started fighting in the 1970s for a separate state for Tamils in Sri Lanka's north and east.
They argued that the Tamils had been discriminated against by successive majority Sinhalese governments.
After army advances in the east in 2007 and progress in the north in 2008, most of Sri Lanka is now under government control.
But despite the army's commanding position, the rebels have shown on innumerable occasions their capacity to fight a guerrilla war through the use of suicide bombings, assassinations and even aerial attacks carried out by planes operating from secret jungle bases.
The conflict has killed an estimated 70,000 people, displaced thousands more and held back the island's growth and economic development.
Both the military and the Tigers have been regularly accused of gross abuses of human rights by organisations such as Amnesty International and Human Rights Watch.