It described the situation in northern Sri Lanka, where civilians are trapped inside a government-designated "safe area", as a "bloodbath".
Sri Lanka has objected to the remark and says it will formally complain.
A doctor working in the war zone said more than 430 people had been killed over two days of bombardment.
Tamil Tiger rebels and government forces have blamed each other for causing the deaths through artillery bombardments, the BBC's Charles Haviland reports from Colombo.
The propaganda battle reflects the intensity of the fighting on the ground, our correspondent adds.
'War without witness'
"The secretary general is appalled at the killing of hundreds of civilians in Sri Lanka over the weekend," a statement from Mr Ban's office said.
David Miliband: 'There is no question that civilian life is being lost on a large scale'
He urged Sri Lanka "to explore all possible options to bring the conflict to an end without further bloodshed" and asked the rebels to agree to a halt in the fighting.
The UK foreign secretary was in New York for a Security Council debate on the Middle East but he and Mr Kouchner also conducted a meeting on Sri Lanka with 10 of the 15 countries on the Security Council and aid workers and advocacy groups.
Russia, China and Vietnam were not there, arguing that say there is no need for the Security Council to take action as what is happening is a civil war, not a threat to international peace and security.
"Our message is a simple one, which is that the killing must stop," Mr Miliband said.
"The civilians... trapped... are the victims of what at the moment is a war without witness."
He raised doubts about whether Sri Lanka's government should get a major loan from the International Monetary Fund given its behaviour.
The UK foreign secretary also criticised Sri Lanka for expelling a team of British journalists.
It is not clear what diplomatic options are left open if the Sri Lankan government continues with an offensive which it hopes will lead to a decisive military victory, the BBC's Laura Trevelyan reports from the UN.
Countries at the UN who have faced rebel movements tend to sympathise with Sri Lanka, our correspondent says.
It would require a vote to formally put Sri Lanka on the agenda of the Council, and Western diplomats say they have not yet got to the stage of pushing for that.
The Tamil Tigers, who have fought for an independent homeland for Sri Lanka's Tamil minority since 1983, have been pushed back by government forces into a tiny pocket of territory.
More than 70,000 people have been killed in the war.
The UN has made a renewed plea for access to the war zone.
The UN's acting humanitarian coordinator in the country, Amin Awad, told the BBC that without a UN presence in the zone of hostilities it was impossible to verify the accusations and counter-accusations.
But he added that innocent civilians were being killed and that was unacceptable.
He urged the Sri Lankan government to grant access to UN humanitarian officials so people could be evacuated and the sick and wounded attended to.
"We don't have any independent assessment of the condition of people inside the zone but we understand that malnutrition levels are extremely high, not to mention of course battlefield casualties," said the UN spokesman in Sri Lanka, Gordon Weiss.
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