The U.N. Independent International Commission of Inquiry on Syria said minority ethnic and religious groups like Christians, Druse, Kurds and Turkmen are being drawn into the fighting, the U.N. News Center reported.
Foreign fighters have been drawn to Syria in greater numbers. Most are Sunni Muslims fighting with the rebels but Shiites from Lebanon and Iran have joined the government side.
As a result, the conflict is becoming more sectarian, the report said.
The United Nations appealed this week for $1.5 billion in humanitarian aid for Syrian refugees.
What has become a civil war began in early 2011 with large demonstrations against the government of President Bashar Assad. Thousands of people have been killed and 500,000 have fled the country, primarily to Turkey and Lebanon.
"The war of attrition that is being fought in Syria has brought immeasurable destruction and human suffering to the civilian population. As the conflict drags on, the parties have become ever more violent and unpredictable, which has led to their conduct increasingly being in breach of international law," the commission said.
The Syrian Network for Human Rights said Thursday that the government has arrested 194,000 people since March 2011. The group said 60,000 have been victims of "forced disappearance," arrested or abducted by government agencies or political groups that refuse to acknowledge the victims are being held.
The United Nations predicted the number of refugees would top 1 million. Its $1.5 billion appeal is its largest ever for refugee relief.
"Unless these funds come quickly, we will not be able to fully respond to the lifesaving needs of civilians who flee Syria every hour of the day, many in a truly desperate condition," Regional Refugee Coordinator Panos Moumtzis said.
Under a worst-case situation, in which the conflict results in a massive exodus of civilians, the number of refugees could rise to 1.85 million, Moumtzis said.
The Office of the U.N. High Commissioner for Refugees said U.N. agencies needed $1 billion to help refugees pouring out of Syria at a rate of 2,000 to 3,000 people daily.
More than 525,000 Syrians have registered or are being assisted as refugees, seven times as many as in May and double the number recorded in early September, the refugee agency said.
They include about 160,000 in Lebanon, 150,000 in Jordan, 140,000 in Turkey, more than 65,000 in Iraq and more than 10,000 in Egypt.
About half the Syrians huddled in refugee camps are children, UNICEF estimated.
Palestinian Authority President Mahmoud Abbas said Wednesday he was ready to accept Palestinian refugees fleeing Syria.
The move would require the consent of Israel, which controls the borders. Israel had no immediate response.
Israel also did not respond to a call from U.N. Secretary-General Ban Ki-moon Wednesday to accept Syrian refugees itself. Israel remains technically in a state of war with Syria.
In addition to the $1 billion for refugees, the refugee agency asked donor countries for $519 million so it could provide emergency food, water, medical attention, shelter and other basic necessities to 4 million people inside Syria -- roughly 20 percent of the country's population.
The violence has left Syria with "nearly no more safe areas," Radhouane Nouicer, U.N. regional humanitarian coordinator for Syria, said in a statement Wednesday.
"The magnitude of this crisis is indisputable," he said.
Fighting raged in districts around Damascus' Yarmouk Palestinian neighborhood, the Britain-based Syrian Observatory for Human Rights said.
Assad forces attacked insurgent positions, seized weapons and "eliminated a number of terrorists," the state-run Syrian Arab News Agency reported.
Another SANA report said the regime killed "scores of terrorists."
"Terrorists" is the regime's standard term for armed opponents of Assad.
Regime airstrikes Sunday killed at least 25 people in the former Yarmouk Camp, a densely populated mixed neighborhood where more than 150,000 Palestinians live alongside 350,000 Syrians 5 miles south of the center of Damascus.
The aerial assault caused more than 5,000 people to flee.
The rebel Free Syrian Army claimed Monday to have gained control of Yarmouk as part of its stated intention to seize control of the central part of the capital and topple the Assad regime.