Picking through the still-smoking ruins of Guernica, exactly 70 years ago today, The Times correspondent George Lowther Steer came across a handful of bomb cases stamped with the German imperial eagle. Here was final proof that the planes that had rained incendiary bombs on the Basque town a day earlier – April 26, 1937 – were sent by Nazi Germany in support of Franco’s Nationalists, to crush Basque morale.

Steer’s damning report in The Times, exposing the lie of German neutrality in the Spanish Civil War, ignited another sort of firestorm. “In the form of its execution and the scale of the destruction it wrought, no less than in the selection of its objective, the raid on Guernica is unparalleled in military history,” wrote Steer. Franco’s Fascist allies in Germany and Italy had deliberately targeted a defenceless civilian population, killing an estimated 1,600 people. This was the first saturation bombing on European soil: the age of total war had arrived.

Far away in Paris, Pablo Picasso read the newspaper reports and saw the black-and-white photographs of Guernica’s destruction. Outraged, revolted and looking for a subject to fulfil his commission for the international exhibition in Paris, Picasso created Guernica in six weeks, the huge black-and-white mural of death and terror that still stands as the most potent symbol of modern war’s barbarity.

In parts, the grey and stippled texture of the canvas is reminiscent of newsprint, which seems appropriate for an alliance between campaigning journalism and campaigning art. Picasso had declared war on brutal warfare in which innocents were indiscriminately slaughtered. (Intriguingly, Hitler also thought he had enlisted art on his side: the Führer decided to send the Luftwaffe to aid the Nationalist rebels after seeing Wagner’s Siegfried at Bayreuth, and the operation was codenamed, in typical overoperatic style, “Magic Fire”.) From Paris the great painting set off, like an international star, on a tour of Europe and the US to raise money for the Republican cause. At the Whitechapel art gallery, the price of admission was a pair of boots in reasonable condition to be sent to Republican soldiers at the Front. Working men left the gallery barefoot, having placed their boots beneath the picture, as if at a shrine.

No artwork has ever achieved such a transformation so swiftly: from reality to journalism to art to worldwide celebrity in the space of just a few months. Franco made it a criminal offence to own a postcard of the picture. Guernica forged its own instant mythology: it was said that when Paris was under Nazi occupation, a German officer visited Picasso’s studio looking for evidence of Resistance activity, and pointed to a photograph of Guernica on the wall. “Did you do this?” he asked. No,” replied Picasso. “You did.”

The painting reflected the civilised world’s revulsion at a new type of mechanical warfare. Picasso painted Guernica in a state of shock and wonder. To Steer, the journalist, surveying the devastation, the decision to kill civilians from the air seemed both strange and horrible, a reversal of accepted military rules. Indeed, so improbable did the bombing appear that Franco denied it had ever happened, and insisted that the Republicans had torched the town themselves.

From a distance of 70 years, however, the scenes that inspired Picasso seem grimly familiar. After Guernica came the London Blitz, Dresden, Hiroshima, Hanoi and Baghdad. The bombing of civilians is an accepted, indeed a central element of warfare, despite the euphemisms of “strategic bombing” and “collateral damage”. When the Luftwaffe’s Condor Legion swept down on undefended Guernica, it was pioneering the use of “shock and awe”. In 1937 Steer wrote with fury that the “the object of the bombardment was seemingly the demoralisation of the civil population”. Today that would be a statement of the militarily obvious.

In Picasso’s painting – a riot of twisted limbs, maddened animals, a woman keening over her dead baby – the cause of death is not apparent: it has simply fallen from the sky. Today you may watch grotesquely similar scenes on television, in colour.

But if Guernica is a condemnation of war, it is also a peculiar symbol of peace. Having first offered it “to the Basque people” (an offer rejected by the president of the Basque Country), Picasso stated that the painting should never return to Spain until fascism had been eradicated from his homeland. Sure enough, in 1981, six years after Franco’s death, Guernica returned to a democratic Spain. There are now growing demands from Basques for Guernica to be brought from Madrid to the very place whose sufferings inspired it – a final symbolic act of which its creator would surely approve.

Picasso declared that he had painted Guernica to “express my abhorrence of the military caste which has sunk Spain in an ocean of pain and death”. The painting has lost none of it power to embarrass the military caste.

A tapestry copy of Guernica hangs in the UN building, outside the Security Council meeting room. In 2003, when General Colin Powell came to the UN to make the case for war, the image was discreetly swathed in a blue shroud. How could the general make the case for bombing Baghdad with the most powerful indictment of aerial bombing openly accusing him a few yards away? A UN spokesman claimed the Guernica had been covered up because television cameras needed a bolder backdrop than Picasso’s subtle greys. The truth, however, was that Picasso’s denunciation is as black and white today as it was seven decades ago.

Times Recommends

• In the real world, the public sector must pay
• Playing politics in a land of double Dutch
• Be like the plinth people: not set in stone