Currently, U.N. troops and employees accused of wrongdoing are sent home to be dealt with by their own government but are often never punished.
The United Nations could also withhold salaries for peacekeepers found guilty and put the money in a fund to care for their victims or the babies they father.
"There is a need to try to ensure that the fathers, who can be identified, perhaps through blood or DNA testing, bear some financial responsibility for their actions," the report said.
The report also calls for the United Nations to form an investigative arm to pursue misconduct allegations.
With the United Nations burdened by scandals including alleged corruption in the oil-for-food program in Iraq and allegations of sexual harassment by U.N. staff, officials have sought to deal with the peacekeeper sex abuse issue quickly.
Congress is also looking into the issue, and Rep. Christopher Smith, R-N.J., has proposed a bill that would require troop-contributing nations to have codes of conduct in place. Otherwise, the United States would withhold funding for missions.
Zeid set 2007 as a target date to complete many of his recommendations. In a clear reference to the United States, he said members' concerns had weighed heavily when he wrote the report. The United States contributes about 25 percent of peacekeeping budgets, the most of any nation.
"Parliaments, and especially those legislatures of the largest contributors to the U.N. peacekeeping budget, may feel ill at ease over continuing to extend support to peacekeeping in the absence of any significant change," Zeid said.
