She said without real progress, the patience of the international community "will start to wear thin."
The government of President Mahinda Rajapaksa has so far ignored calls for a thorough local inquiry into war abuses and says it will not allow any international probe. He denies allegations of abuses by the army.
Since the Tamil Tigers' 27-year battle for an ethnic homeland ended, Rajapaksa's grip on power has tightened. Recent reports of media harassment and rights abuses have also raised alarms, although a convincing victory for the main ethnic Tamil party in provincial elections in northern Sri Lanka in September were seen as a small step toward devolution of power.
Biswal, whose brief covers South and Central Asia, also voiced concern Friday about political violence in Bangladesh, where street clashes between rival factions have killed about 40 people and wounded hundreds in the past month.
The opposition is resisting government plans to hold a general election on Jan. 5 unless Prime Minister Sheikh Hasina allows a neutral caretaker administration to oversee the polls.
Biswal, who recently visited Dhaka, called for the major political parties to come together and work out a compromise "that will allow for elections to take place that the people of Bangladesh have confidence in and feel are credible."
She said failure to achieve a peaceful political transition poses the greatest obstacle to Bangladesh continuing its progress of the past decade in areas such as reducing child and maternal mortality, and improving food security.
Analysts fear the political chaos could exacerbate the economic woes of the country of 160 million people and lead to radicalization in a strategic pocket of South Asia.