(Gaddafi) has done is totally unacceptable," Ban told journalists on Wednesday.
"After such long and extensive discussions and my strong urging, and even appeal to him, he has not heeded," he added. "This is not acceptable."
Ban warned that the volatile situation in the North African nation could take several directions---many of them dangerous.
"The situation is developing rapidly towards a very dangerous situation," he said. "Therefore we need to very carefully monitor the situation."
International censure against Gaddafi escalated after reports that the regime was firing at the protesters from war planes.
On Tuesday, the UN Security Council issued a strongly worded press statement calling on the Libyan regime to stop attacking pro-democracy protesters, and also called for accountability against those who had carried out these attacks against civilians.
In its statement, the Council, "condemned the violence and use of force against civilians, deplored the repression against peaceful demonstrators, and expressed deep regret at the deaths of hundreds of civilians."
Observers, however, are calling for stronger action on part of the UN such as establishing no-fly zones, imposing sanctions and setting up a humanitarian corridor.
"The specific measures, like no-fly zones and some other specific sanctions, including specific measures, like sanctions, are the ones which the Security Council needs to determine," Ban said.
The Arab League also issued a statement banning Libya from attending meetings until it stopped attacking its citizens.
Meanwhile, in a long speech made in Tripoli, Gaddafi refused to relent to the demonstrators who want an end to his 42-year-old reign. "I will die as a martyr at the end," he said.
Ban also welcomed the decision by the Geneva-based UN Human Rights Council to meet in a special session on Friday with the possibility of setting up an international investigation into the recent events in Libya.
Navi Pillay, UN human rights chief, has already called for an independent investigation.
Following the overthrow of leaders in Tunisia and Egypt, large-scale protests have erupted in several countries in the Middle East and North Africa including Bahrain, Yemen and Libya. Ban said on Wednesday that he is dispatching top officials to Egypt and Tunisia to assess the situation on the ground.
Libya, however, has responded with an extreme show of force resulting in the death of hundreds of people.
"I condemn them loudly and without qualification," Ban reiterated saying, "Those responsible must be held accountable in courts of law."