U.N. Secretary-General Kofi Annan says the worsening conflict in Iraq has increased the chances of an an all-out civil war in the country or even a regional conflict.

Mr. Annan made that assessment in a report Friday to the U.N. Security Council.

The U.N. chief said the sectarian carnage in Iraq has led to a vicious cycle of violence fueled by revenge killings. He said the challenge is not only to defuse the violence, but to prevent its escalation.

Mr. Annan proposed a possible international conference to promote national reconciliation.

Meanwhile, news sources say Iraq will hold a national reconciliation conference next week, as proposed by Iraqi Prime Minister Nouri al-Maliki on Tuesday.

The sources say the conference will take place on December 16.

In other news, Iraqi and U.S. officials have given differing accounts of a raid north of Baghdad that killed up to 20 people.

The U.S. military says coalition forces killed 20 suspected terrorists, including two women, during a ground and air operation in the Thar Thar area. But a local official said the raid killed at least 17 civilians, mainly women and children.