Her tiny skull cracked asunder from forehead to crown, one-year-old Maysa Athamna lay next to her sister, Maram, in the mortuary, along with their dead cousin, Sanaa.

They were among 18 Palestinians, including at least 14 women and children, killed yesterday by a dawn Israeli artillery barrage that hit their home in Gaza as they slept.

The carnage in Beit Hanoun, drew worldwide condemnation and looked set to pitch the Middle East conflict into another dismal cycle of reprisal attacks.

Amid pools of blood and gore-spattered walls, survivors told how they fled the first shell straight into the path of the others.

Israel suspended artillery fire and Ehud Olmert, the Israeli Prime Minister, expressed regret for the civilian deaths.

But Hamas announced that it would resume attacks inside Israel, and Khaled Mashaal, its supreme leader in Damascus, called on other militant groups to follow suit. “Our response will be by deeds, not words,” he said. “The armed struggle is free to resume, and the resistance will be dictated by local circumstances.”

Ghazi Hamad, a Hamas spokesman in Gaza, played down a call by the group’s armed wing for Muslims to direct “hard lessons” against the United States, Israel’s chief ally. But he said that Israel “is a state that believes in killing, and therefore this state should cease to exist”.

The politicians’ words were in stark contrast with the shocked silence around the Athamna family’s four-storey house in northern Gaza, after the deadliest Israeli strike in the Palestinian territories in four years.

Witnesses squatted beside breezeblock walls, staring blankly at bloodstained shoes and clothing from the dead and wounded. Inside the house, babies’ cots, prams and pensioners’ wheelchairs lay abandoned in the haste to escape from a building with football-sized holes punched through the walls by shrapnel.

Ayman Athamna, 37, said that within 15 minutes he lost at least 15 members of his extended family, including his mother, grandmother and four children under 12.

“I woke up around 5.30 and woke my wife to pray,” he said. “She made a cup of tea, and my three-year-old daughter was playing with me. The first shell hit near the alleyway. I picked up my phone and ran down the stairs, which were full of dust from the impact. My brothers and all their families were still inside the house.”

When he heard a second shell screaming in, he took shelter, moving quicker than his neighbour, Saker Adwan. “I found half of his body on the ground — he was still alive. As I pulled the torso away into a side street, I told him to say a prayer. He started, but only said, ‘There is only one God . . .’, and then he died.”

Zayed Kafarneh, the first ambulanceman to arrive, said that he could not reach victims for ten minutes because more shells landed after the first.

Yazan Athamna, 15, lay in Kamal Adwan Hospital, weeping at the loss of his mother and cousins, having escaped the worst because he was evacuated quickly: “I don’t believe it. I wake up and I find all of them dead. I can’t believe it.”

Major-General Yoav Galant, the head of Israel’s Southern Command, said that 12 shells were fired, and initial investigations indicated a problem with the artillery’s “pinpointing device”. He said that the rounds had been aimed at a “nearby area”, which Israeli Defence Force officials identified as open ground near Beit Hanoun, from which Palestinian militants had fired rockets at Ashkelon the night before. “We had a specific alert on a rocket launching which was supposed to occur again from the same location,” General Galant said.

Israeli tanks withdrew from Beit Hanoun only 24 hours earlier, after a six-day siege that caused widespread destruction in the town.

Tzipi Livni, the Israeli Foreign Minister, called it a “regrettable incident”, but added: “Israel is faced with constant attack by the Palestinian terror organisations, in the form of relentless firing of Qassam rockets at Israeli population centres. Israel has no desire to harm innocent people, but only to defend its citizens.”

However, Mahmoud Abbas, the Palestinian President, whose moderate Fatah faction has sought in vain to form a unity government with Hamas, warned Israel that its “terrible, despicable crime” jeopardised the already-slim prospects of reaching elusive agreements.

“We tell the Israelis, you are not seeking peace at all, but are destroying all chances for peace. You must therefore bear all the consequences of these crimes,” he said.

Amir Peretz, the Israeli Defence Minister, called on Palestinian factions to “stop with the bloodshed” and recognise Israel’s existence. “We recognised your right to an independent state; let go of violence and terror, invest in schools and not arms,” he said. Margaret Beckett, the Foreign Secretary, echoed widespread international concern, saying that she was “gravely disturbed” at the civilian casualties.

“Israel must respect its obligation to avoid harming civilians. It is hard to see what this action was meant to achieve and how it can be justified,” she said, while also criticising Palestinian rocket attacks.

But the bitterest critics were in Beit Hanoun. Walid Ismain, 46, the uncle of Yazan, said: “How can Israel say it is defending itself? Is killing innocent women and children in their homes a defensive act?”

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