Khaled Meshaal, the Hamas leader, has vowed to retaliate with force against a deadly Israeli strike which killed at least 18 Palestinian civilians in the Gaza Strip this morning.

At a press conference in Damascus, hours after Israeli tanks shelled the residential district of Beit Hanoun in northern Gaza, the exiled Hamas chief said that the militant group had abandoned its truce with Israeli and was free to resume attacks on the Jewish state.

"The truce ended at the end of 2005," he said. "The armed struggle is free to resume, and the resistance will be dictated by local circumstances."

"Our condemnation will not be in words but in deeds, the resistance will respond," he added. "All Palestinian groups are urged to activate resistance despite the difficult situation on the ground. Our confidence in our military wing to respond is big. There must be a roaring reaction so that we avenge all those victims."

The shells hit a row of apartment blocks in Beit Hanoun in the early hours. Witnesses said that the artillery bombardment hit at least seven houses, and eight children and five women were among those killed. Estimates suggested 54 people had been wounded.

Ayman Athamna, 37, told The Times in Beit Hanoun that he had lost 15 members of his extended family, including five children, when the shells started landing shortly after dawn.

"It is the saddest scene and images I have ever seen. We saw legs, we saw heads, we saw hands scattered in the street," added another witness, 22-year-old Attaf Hamad.

In a rare show of unity that displayed the depth of Palestinian anger at Israel's deadliest attack on Gaza in months, Mahmoud Abbas, the Palestinian President, joined forces with Ismail Haniya, the Hamas leader who is Prime Minister, to donate blood.

"We are giving blood for our children wounded in the Beit Hanun massacre," said Mr Abbas before he and Mr Haniya visited the bedsides of the wounded in a hospital in the northern town of Beit Lahiya.

In Damascus, Mr Meshaal blamed the United States and Arab governments for the Israeli shelling attack, saying it took place "under American cover and aided by a complete Arab silence."

He called for the formation of an international court to try Israeli leaders for war crimes in the Gaza Strip.

The Israeli army said that it fired artillery shells at northern Gaza in response to militant rocket fire and was checking reports that many Palestinian civilians had been killed. It expressed regret for the civilian deaths and said that it was investigating the incident.

Margaret Beckett, the Foreign Secretary, said that she was deeply disturbed by the deaths, adding that it was hard to see how the Israeli strike could be justified.

"I am gravely disturbed by the deaths of Palestinian civilians, including women and children, in an Israeli strike on Beit Hanoun in the Gaza Strip," Mrs Beckett said in a statement.

"The British government has repeatedly expressed its deep concern over mounting casualties and civilian suffering in Gaza in recent months and raised these concerns with the government of Israel.

"Israel must respect its obligation to avoid harming civilians. Continuing rocket attacks by Palestinian militants are also unacceptable. I call on all sides to meet their obligations under international humanitarian law and to do their utmost to avoid harming civilians, especially children."

The truce that Hamas and a second militant group declared with Israel early last year had expired on December 31, but it had continued to be honoured, although with some infractions.

Israel pulled its forces out of Gaza last year after a 38-year occupation. But tensions have flared since Hamas rose to power after winning Palestinian elections in January, and gunmen captured an Israeli soldier in a cross-border raid in June.

The killings follow Israel's withdrawal from the northern town on Tuesday after a week-long assault, designed to stop militants firing rockets at the Jewish state, in which 52 militants and civilians were killed.

In response to the attacks, Mr Abbas ordered three days of mourning throughout the Palestinian territories.

"This is a horrible, ugly massacre committed by the occupation against our children, our women and elderly in Beit Hanoun," he said in a statement.

"We urge and call the (United Nations) Security Council to convene immediately to stop the massacres committed against our people and to uphold their responsibility to stop these massacres."

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