UN chief: Western Sahara settlement is possible
Guterres told the Security Council a settlement would require "strong political will, not just from the parties and neighbouring states, but also from the international community", according to the report seen by AFP.
"A solution to the conflict is possible," he said.
The United Nations hosted a second round of talks in Switzerland two weeks ago between Morocco, the Polisario Front liberation movement, Algeria and Mauritania on the future of the north African territory.
The Polisario fought a war with Morocco from 1975 to 1991, when a ceasefire deal was agreed and a UN peace mission was deployed to monitor the truce in the former Spanish colony.
The mission, known as MINURSO, was to prepare a referendum on Western Sahara's independence from Morocco, but it never materialized.
Morocco, which annexed the territory after Spain withdrew in 1975, considers Western Sahara an integral part of the kingdom and has offered autonomy, but not an independence referendum.
The conflict has remained frozen and the divided council has made little progress toward a settlement, with France backing Morocco while African countries supported the Polisario.
In his report, Guterres said a "core problem" in the search for a solution was the lack of trust on all sides, adding that "building trust will take time" and encouraging "good faith gestures" from the sides.
The UN chief praised the Polisario for destroying its last remaining stockpile of landmines, saying this was a "commendable first step" toward building trust.
He said all delegations were aware that their people looked to the recent talks with hope, having suffered the costs of the conflict.
The first round of talks held in December marked the first time in six years that the sides sat down at the negotiating table.
The talks are led by UN envoy Horst Koehler, a former German president who took on the peacemaking role in 2017.
In the report, Guterres called for extending MINURSO, but did not specify the duration of the new mandate.
The council is to decide at the end of April on whether to renew the mandate of MINURSO, which the United States has said should not remain in place without progress toward a political solution.