At the same time, the secretary general, Ban Ki-moon, voiced hope that there may be a chance for progress on ending a 13-month conflict that has brought Syria to the brink of civil war.
Ban proposed an expanded UN monitoring mission, which, if approved by the council, would comprise "an initial deployment" of up to 300 unarmed observers to supervise a fragile week-old ceasefire between forces loyal to the Syrian president, Bashar al-Assad, and opposition fighters seeking to oust him.
But he cautioned that the fighting had not ended.
"The Syrian government has yet to fully implement its initial obligations regarding the actions and deployments of its troops, or to return them to barracks," he said in a preliminary assessment of Syria's compliance with a resolution on Syria the security council passed on Saturday.
"Violent incidents and reports of casualties have escalated again in recent days, with reports of shelling of civilian areas and abuses by government forces," he said. "The government reports violent actions by armed groups."
"The cessation of armed violence is therefore clearly incomplete," Ban said, adding that both sides say they are committed to ending the "violence in all its forms".
Diplomats on the 15-nation council say Ban's report and a briefing they will receive from UN-Arab League mediator Kofi Annan's deputy, Jean-Marie Guéhenno, on Thursday will be crucial in determining whether the conditions are right for deploying a larger monitoring mission to Syria.
US and European diplomats on the council have suggested that Syria's lack of full compliance with its obligations to end the violence might make it difficult for them to support a new resolution that would be needed to deploy an expanded observer mission.
The security council approved a resolution on Saturday that authorised the deployment of an advance team of up to 30 unarmed observers to Syria. It was the first council resolution on the Syria crisis that China and Damascus' close ally, Russia, did not veto. They vetoed two earlier resolutions.
On the subject of Damascus's partial compliance with Annan's peace plan, Ban said, "It does not amount yet to the clear signal expected from the Syrian authorities."
"I remain deeply concerned about the gravity of the situation in the country," Ban said. "However, without underestimating the serious challenges ahead, an opportunity for progress may now exist, on which we need to build."
Ban said the violence had decreased in recent days since a shaky 12 April truce came into force. He said a monitoring force would be helpful in securing an end to all fighting, although it was essential the conditions be right for its deployment.
"Developments since 12 April underline the importance of sending a clear message to the authorities that a cessation of armed violence must be respected in full, and that action is needed on all aspects of [Annan's] six-point [peace] plan," he said.
"At the same time the very fragility of the situation underscores the importance of putting in place arrangements that can allow impartial supervision and monitoring," he said.
An advance team of monitors in Syria had visited the town of Deraa and "enjoyed freedom of movement" there, Ban said. But he noted that "the team's initial request to visit Homs was not granted, with officials claiming security concerns".
Annan's peace plan calls for an end to fighting by government security forces and rebels, withdrawal of heavy weapons from towns, return of the army to barracks, humanitarian access and dialogue between the government and opposition aimed at a "political transition" for the country.
Ban also said there had been "no substantive progress" in negotiations for humanitarian access in Syria.
