Sunday's strike, the bloodiest since Israel's showdown with Lebanon's Shia group Hezbollah began on July 12, prompted the Lebanese government to cancel a visit by the US secretary of state, Condoleezza Rice.
Lebanon's premier, Fouad Sinioria, said: "There is no place on this sad morning for any discussion other than an immediate and unconditional ceasefire as well as an international investigation into the Israeli massacres in Lebanon now."
Hezbollah threatened to retaliate, saying that "this horrific massacre [at Qana] will not go without a response".
Rice 'deeply saddened'
Rice said she was "deeply saddened by the terrible loss of innocent life". She also urged Israel to take "extraordinary care" to avoid civilian deaths in Lebanon.
And while calling for a ceasefire, she said that a truce could not mean a return to the position before the war, which was triggered by Hezbollah's abduction of two Israeli soldiers in a raid out of south Lebanon on July 12.
"France condemns this unjustified action which demonstrates more than ever the need for an immediate ceasefire without which there will only be other such incidents"
Israel and the United States have said they want to ensure that Hezbollah can no longer carry out raids and rocket attacks and that it is eventually disarmed under a UN resolution.
Washington has consistently held the view that Israel has the "right to defend itself", albeit while using "restraint".
The White House spokesman, Blaine Rethmeier, said after learning about Sunday's attack there was no change in that position.
The United States "continues to urge Israel to use restraint," Rethmeier said in a telephone interview with AFP. Israel has the "right to defence".
Israel's prime minister, Ehud Olmert, expressed "deep sorrow" about the deaths. "Nothing is more alien to our spirit, further from our thoughts, or more contrary to our interests, than hurting innocents," he said.
But he said that "all the residents [of Qana] were warned and told to leave. No one was ordered to fire on civilians and we have no policy of killing innocent people."
"The village and its surrounding areas were a source for launching hundreds of rockets" by Hezbollah.
Close to 550 Lebanese, most of them civilians, have been killed in Israel's 19-day-old war on Lebanon, although the health minister estimated the toll at 750 including unrecovered bodies. Fifty-one Israelis have been killed.
Washington insists that Israel
has the right to self-defence
The European Union's foreign policy chief, Javier Solana, said nothing could justify the Qana bombing and said he had spoken Siniora to express his "profound dismay".
"Nothing can justify that," Solana said in a statement issued in Brussels, adding that the EU backed an immediate ceasefire.
France and Britain condemned the attack.
The office of the French president, Jacques Chriac, said in a statement: "The president learnt with concern about the act of violence which cost the lives of numerous innocent victims, notably women and children in Qana.
"France condemns this unjustified action, which demonstrates more than ever the need for an immediate ceasefire without which there will only be other such incidents."
The UN mission in Paris announced later on Sunday that France had circulated a draft resolution in the United Nations Security Council calling for an immediate ceasefire in the Middle East.
And UN officials in New York said an emergency session of the Security Council would be convened on Sunday.
Britain's foreign secretary, Margaret Beckett, described the strikes as "absolutely dreadful" and "quite appalling".
"We have repeatedly urged Israel to act proportionately," she said.
Arab and Muslim leaders spoke of "crimes" and Syria's president, Bashal al-Assad, labelled the attack "state terrorism."
"The massacre committed by Israel in Qana this morning shows the barbarity of this aggressive entity. It constitutes state terrorism committed in front of the eyes and ears of the world," al-Assad said in remarks carried by state news agency SANA.
King Abdullah of Jordan said: "This criminal aggression is an ugly crime that has been committed by the Israeli forces in the city of Qana that is a gross violation of all international statutes."
Most of the Qana casualties were
Abdullah, a close US ally, repeated his call for an immediate ceasefire.
Iran, accused by Washington of backing Hezbollah, also condemned the raid.
"I think Israeli officials and some American ones should be tried for these sorts of crimes," said Hamid Reza Asefi, the foreign ministry spokesman.
And the Egyptian President, Hosni Mubarak, called the airstrike "irresponsible".
"The Arab Republic of Egypt is highly disturbed and condemns the irresponsible Israeli attack on the Lebanese village of Qana, which led to the loss of innocent victims, most of which were women and children," a statement from the presidency said.
Egypt, which has already called for an immediate and unconditional ceasefire, stressed "the need for a serious international effort to issue an urgent Security Council resolution to stop military attacks immediately".
The United Arab Emirates condemned what it described as an "ugly massacre", and the Palestinian president, Mahmoud Abbas, said it was a "crime" that underlined the need for an immediate ceasefire in the region.
Echoing Hezbollah's warning of retaliation, Mushir al-Masri, an MP with the Palestinian ruling Hamas group, said: "In the face of this open war against the Arab and Muslim nations all options are open, including striking the depth of the Zionist entity."
"The massacre committed by Israel in Qana this morning shows the barbarity of this aggressive entity. It constitutes state terrorism committed in front of the eyes and ears of the world"
Bashar al-Assad, Syria's president
The armed wing of Abbas's Fatah faction said it would target the United States and other Western countries in retaliation.