Mr Annan said the introduction of US officials next week to monitor the road map was "a beginning, and it may be enough if the parties are able to break the cycle of violence".
"In the interim, I would like to see an armed peacekeeping force act as a buffer between the Israelis and Palestinians," he said in New York.
Mr Annan disputed the decision by the US and Israel to try to sideline Palestinian Authority President Yasser Arafat from the peace process, saying he had "not been entirely negative".
The Roadmap is going nowhere. Israel's effort to ensure its own security does no more than incite Palestinian retaliation. The Palestinian government does not have the capacity to provide security. A third party needs to do it.
And (just quietly) wasn't the occupation of Iraq going to guarantee a Middle East peace settlement?