Ban said he had spent the day talking with world leaders including Israeli Prime Minister Benjamin Netanyahu, Palestinian president Mahmud Abbas and Egypt's President Abdel Fattah al-Sisi, as well as US Secretary of State John Kerry.
It came as Israeli warplanes pounded Gaza, killing dozens in a major new confrontation with Palestinian militants, as Hamas flexed its firepower and sent thousands running for shelters across the country.
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"Gaza is on a knife edge. The deteriorating situation is leading to a downward spiral which could quickly get beyond anyone's control.
"The risk of violence expanding further still is real. Gaza, and the region as a whole, cannot afford another full-blown war."
Ban condemned the rocket attacks launched from Gaza on Israel, saying: "Such attacks are unacceptable and must stop."
He said he had also urged Netanyahu to exercise maximum restraint and to respect international obligations to protect civilians.
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