"The killing this morning of so many civilians in Gaza, including many children, is a profoundly shocking event. Israel has a right to defend itself, but not at the price of the lives of the innocent," Benita Ferrero-Waldner said in a statement.
"It is very important for all parties to exercise utmost restraint and limit themselves to actions which are proportionate and in accordance with international humanitarian law," she added.
Women mourn in Beit Hanoun (Photo: Reuters)
Eighteen people were killed and at least 30 were injured in the Beit Hanoun incident, which was caused by a lethal barrage of Israel Defense Forces shells which landed on residential houses.
According to Palestinian reports, 13 of the casualties were members of one family. Seven children and four women were among the casualties.
IDF officials said in response that the artillery fire was directed at a Qassam launching spot and another nearby spot from where Palestinians planned to launch Qassams.
Abbas: A horrible massacre
Italy's foreign minister branded the killing of civilians by Israeli artillery shells a "massacre" and called for an urgent international initiative to stop the violence.
"This morning 18 people, women and children, were massacred ... an escalation of violence I think is unacceptable," Foreign Minister Massimo D'Alema told reporters.
"I think that now an international initiative to unblock the Palestinian situation is essential."
"It is clear that if this escalation of violence is not stopped we risk returning to a climate of war," D'Alema said.
Turkey's Foreign Ministry called the incident in Beit Hanoun "devastating and disproportionate" in an announcement issued Wednesday.
"The Israeli attack is a blow to regional peace efforts, and will create a cycle of violence," said the statement.
Hamas politburo chief Khaled Mashaal, who is residing in Damascus, said he would respond to the Beit Hanoun incident "with deeds, not words."
The Palestinian Authority declared three official mourning days in protest of the IDF attack. The Palestinian government convened for an emergency meeting Wednesday following the shelling.
Palestinian Prime Minister Ismail Haniyeh called for an emergency meeting of the United Nations Security Council. Palestinian President Mahmoud Abbas condemned the Beit Hanoun attack, calling it "a horrible massacre."
Ali Waked and AFP contributed to the report