In a statement on Monday he said, "We face a profoundly important test of international solidarity and of our responsibility to prevent atrocities.
"A country in the heart of Africa is descending into complete chaos before our eyes."
Mr Eliasson urged the UN Security Council to strengthen the African Union-led force in the country ahead of a vote due next week.
He said preparations should be made to turn the AU force into a UN peace-keeping operation.
"The country faces a desperate security situation. There is a breakdown of law and order. The population is enduring suffering beyond imagination. As we see far too often, children and women are at the greatest risk," Mr Eliasson said. "Human rights violations are mounting. The use of child soldiers is rising. Sexual violence is growing.
"There are widespread reports of looting, illegal checkpoints, extortion, arbitrary arrests, torture and summary executions."
The CAR has been in turmoil since rebels seized power in March with armed gangs, mainly former Seleka rebels, now controlling most of the country.
"The CAR is becoming a breeding ground for extremists and armed groups in a region that is already suffering from conflict and instability," Mr Eliasson said.
"If this situation is left to fester, it may develop into a religious and ethnic conflict with long-standing consequences, even a civil war that could spread into neighbouring countries."
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