The secretary-general was speaking at an emergency meeting of the UN Security Council, called after Iran on Tuesday launched a massive missile barrage at Israel, which has ramped up its offensive against Hezbollah in Lebanon.
"It is high time to stop the sickening cycle of escalation after escalation that is leading the people of the Middle East straight over the cliff," the UN chief said.
"This deadly cycle of tit-for-tat violence must stop."
Israel's pledge to respond to the Iranian missile attack has raised fears of a spiraling, region-wide war, sending diplomats scrambling for options to de-escalate the situation.
Iran in turn said it would launch an even bigger attack if Israel makes good on its pledge.
Israel shifted its focus last month from the war in Gaza, which was sparked by the October 7 attacks by Iran-backed Hamas, to securing its northern border with Lebanon.
As the Security Council met, Israeli forces were battling Hezbollah militants in Lebanon, following "targeted ground raids" across the border by Israel on Tuesday.
More than 1,000 people have died since last week, in fighting that has included Israeli strikes on Beirut and its southern suburbs.
Israeli Ambassador Danny Danon reiterated his country's plans to retaliate against the Iranian strike, saying "what happened last night in Israel was not a defensive action," but rather a "calculated attack."
Iranian envoy Amir Saeid Iravani meanwhile said "Iran's response was necessary to restore balance and deterrence."
The United States said it supports an Israeli retaliatory response on Iran, though President Joe Biden on Wednesday said he would not support a strike by Israel aimed at wiping out Iran's nuclear facilities.
- Persona non grata -
Earlier Wednesday, Israel declared Guterres "persona non grata" for failing to specifically condemn Iran's missile attack when he condemned on Tuesday the "broadening conflict in the Middle East."
"Anyone who cannot unequivocally condemn Iran's heinous attack on Israel does not deserve to step foot on Israeli soil," said Foreign Minister Israel Katz in a statement.
The United States pushed back on Israel's move, with State Department spokesman Matthew Miller saying it wasn't a "productive step."
Guterres addressed the diplomatic dust-up at the Security Council, saying "as should have been obvious yesterday in the context of the condemnation I expressed, I again strongly condemn yesterday's massive missile attack by Iran on Israel."
The UN chief also reiterated his call for a ceasefire.
"Since last October, Israel has conducted in Gaza the most deadly and destructive military campaign in my years as secretary-general," he said.
"Simultaneously armed Palestinian groups have also used violence. Hamas has continued to launch rockets," he said, adding Iran's missile attack did "nothing to support the cause of the Palestinian people or reduce their suffering."
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