The Sudanese government and rebel groups in Darfur refuse to abandon the military option and are increasingly violating a U.N. arms embargo with the help of dual-use vehicles and aircraft, a U.N. panel said in a new report.

In a report sent to the Security Council on Friday, the panel of experts monitoring U.N. sanctions said the people of Darfur continue "to be victimized by the effects of attacks and counter-attacks involving most of the armed movements that frequently lead to the disproportionate use of force by the Sudanese Armed Forces and their auxiliary forces."

The panel said attacks across the Sudan-Chad border are responsible for "the overwhelming majority of violent incidents in Darfur" this year - and it warned that tensions between the neighbouring countries "represent an increasing cause of instability in the region."

The 94-page report cites violations not only of the arms embargo but of international humanitarian law, including "rampant" sexual assaults and violence against women and girls, and impunity for the perpetrators of crimes.

The Darfur conflict began in February 2003 when ethnic African rebels took up arms against the Arab-dominated Sudanese government in Khartoum, claiming discrimination and neglect. Khartoum is accused of retaliating by arming local nomadic Arab tribes and unleashing militias known as the janjaweed on civilian populations - a charge the government denies.

U.N. officials say at least 300,000 people have lost their lives from violence, disease and displacement, and 2.7 million have been driven from their homes.

The Security Council in March 2005 extended an arms embargo already in force in Darfur for the rebels and the janjaweed to include Sudan's government.

In its investigation of the arms embargo, the panel said it found that an increasing portion of ammunition and military-adapted vehicles used by all parties to the conflict was produced within the past two to three years - after the arms embargo was imposed. This demonstrates "an increasing rate of violation" of the embargo, it said.

The panel said it documented instances of military equipment moving across the Sudan-Chad border, in violation of the arms embargo - and it also documented the Sudanese government's illegal deployment of attack and transport helicopters and jet aircraft and illegal use of Antonov aircraft to bomb in and around several towns including Muhajeriya and near the Oure Cassoni refugee camp in Chad.

In its previous report, the panel first disclosed the government's use of unmanned drones. In this report, it included footage from one flight in northern Sudan.

The panel said it obtained documents showing that the drone was equipped with a Flash Back 2 video recorder manufactured by a British company which was sold to the Mousaei Product Company in the United Arab Emirates. That company turned out to be fictitious, but the panel said it identified the actual company as the Millennuim Product Company LLC.

The report said a few hours after an introductory visit to the company, the panel was told that the sales manager and managing director had left for vacation in their home country, Iran. The Flash Back 2 is designed for military or police use, and the panel said the managing director must have known it would not be used for civilian purposes.

The panel called for stricter controls by companies on products and services that could violate the arms embargo or international humanitarian or human rights law in Darfur.