It was the first time Annan publicly put his opinion in such clear and firm terms.
"As you know, for the past two years, I have spoken quite strongly against the exemption, and I think it would be unfortunate for one to press for such an exemption, given the prisoner abuse in Iraq," Annan told reporters on Thursday as he arrived at UN's New York headquarters.
"I think in this circumstance it would be unwise to press for an exemption and it would be even more unwise on the part of the Security Council to grant it," he stressed.
"It would discredit the council and the United Nations that stands for rule of law and the primacy of rule of law," Annan added. "I don't think it should be encouraged by the council."
US 'special status'
The Security Council resolution would exempt US citizens, whether civilians or military, from the ICC jurisdiction.
A council resolution seeks to renew the exemption, which expires at the end of the month.
So far, the US cannot count on enough votes to get the resolution passed.
Technically, the resolution keeps UN peacekeepers from nations that have not ratified the Rome Treaty, which established the International Criminal Court (ICC), outside its reach. The immunity is renewable in one-year increments.
"The council has, two years ago, provided for such a resolution and in that resolution talked about its renewal," State Department spokesman Richard Boucher said.
"We think it's a technical roll-over that should be done and it should be renewed the way the council said it would.
"And so, we're still talking with other governments in New York and discussing this," he said in Washington.
The court is the first permanent international tribunal to try cases of war crimes, crimes against humanity and genocide. It began operation earlier this year.
Washington signed the Rome Treaty but later backed out, saying it feared its troops abroad could be charged for war crimes.
The US efforts ran up against a scandal touched off by the publication of photographs showing Iraqi prisoners being abused, tortured, and sexually humiliated at the hands of US soldiers and civilian contractors in Abu Ghraib prison outside Baghdad.
Ongoing Iraq scandal
The scandal is kept afloat by new information and a number of ongoing investigations, which indicate that the incidents were neither exceptional nor caused by fringe soldiers, but part of a larger pattern of abuse.
Annan has said in the past that ICC immunity for US citizens was not a good idea.
The Bush administration has exerted considerable effort to oppose the ICC, and to obtain side agreements with individual countries that US citizens would not be brought up on war crimes charges while on the territory of those countries.
The US justification for the bilateral agreements is that the it has a unique role to play in geopolitics and so US citizens need protection from so-called politically motivated prosecution before the ICC.
US President George Bush made diplomatic history by making his country the first to withdraw from the Rome Treaty, which has been signed by 140 countries.
In order to force the US exception, the US has threatened to shut down all UN operations, one by one, as each mandate expires.