It was an unremarkable three-storey building on the edge of town. But for two extended families, the Shalhoubs and the Hashems, it was a last refuge. They could not afford the extortionate taxi fares to Tyre and hoped that if they all crouched together on the ground floor they would be safe.

They were wrong. At about one in the morning, as some of the men were making late night tea, an Israeli bomb smashed into the house. Witnesses describe two explosions a few minutes apart, with survivors desperately moving from one side of the building to the other before being hit by the second blast. By last night, more than 60 bodies had been pulled from the rubble, said Lebanese authorities, 34 of them children. There were eight known survivors.

As yet another body was removed from the wreckage yesterday morning, Naim Raqa, the head of the civil defence team searching the ruins, hung his head in grief: "When they found them, they were all huddled together at the back of the room ... Poor things, they thought the walls would protect them."

The bombing, the bloodiest incident in Israel's 18-day campaign against Hizbullah, drew condemnation from around the world. Late last night Israel announced a suspension of aerial activities in southern Lebanon for 48 hours and said it would coordinate with the UN to allow a 24-hour window for residents in southern Lebanon to leave the area if they wished.

The bombing sparked furious protests outside the UN headquarters in Beirut. Lebanon's prime minister, Fouad Siniora, accused Israel of committing "war crimes" and called off a planned meeting with the US secretary of state, Condoleezza Rice. Israel apologised for the loss of life but said it had been responding to rockets fired from the village.

Muhammad Qassim Shalhoub, a slim 38-year-old construction worker, emerged with a broken hand and minor injuries, but lost his wife, five children and 45 members of his extended family. "Around one o'clock we heard a big explosion," he said. "I don't remember anything after that, but when I opened my eyes I was lying on the floor and my head had hit the wall. There was silence. I didn't hear anything for a while, but then heard screams."

"I said: 'Allahu Akbar [God is most great]. Don't be scared. I will come.' There was blood on my face. I wiped it and looked for my son but couldn't find him. I took three children out - my four-year-old nephew, a girl and her sister. I went outside and screamed for help and three men came and went back inside. There was shelling everywhere. We heard the planes. I was so exhausted I could not go back inside again."

Ibrahim Shalhoub described how he and his cousin had set out to get help after the bombs hit. "It was dark and there was so much smoke. Nobody could do anything till dawn," he said, his eyes still darting around nervously. "I couldn't stop crying, we couldn't help them."

Said Rabab Yousif had her son on her knee when the bomb fell. "I couldn't see anything for 10 minutes and then I saw my son sitting in my lap and covered with rubble," she recalled. "I removed the dirt and the stones I freed him and handed him to the people who were inside rescuing us.

"I then started freeing myself, my hands were free, and then went with two men to rescue my husband. We pulled him from the rubble. I tried to find Zainab, my little daughter, but it was too dark and she was covered deep in rubble I was too scared that they might bomb us again so I just left her and ran outside." She was in hospital with her son and husband, who was paralysed and in a coma. There was no news of her daughter.

Rescue workers were pulling bodies from the rubble all morning. They came across the smallest corpses last, many intact but with lungs crushed by the blast wave of the bombing.

"God is great," a policeman muttered as the body of a young boy no older than 10 was carried away on a stretcher. The boy lay on his side, as if asleep, but for the fine dust that coated his body and the blood around his nose and ears.

The house stood at the top of a hillside on the very edge of Qana and its disembowelled remains had spilled down the slope. Bodies were lined up on the ground - a baby, two young girls and two women. The rigid corpse of a young man lay nearby, his arm rising vertically from beneath a blanket, his index finger pointing up to the sky.

"Where are the stretchers, where are the stretchers?" a rescue worker cried as Israeli warplanes roared overhead. Sami Yazbuk, the head of the Red Cross in Tyre said they got the call at 7am, but had to take a detour to Qana because of shelling on the road.

In a nearby ambulance the smallest victims were stacked one on top of the other to make space for the many to come. A boy and girl, both no more than four years old had been placed head to toe. They were still wearing pyjamas.

Family photos - one showing two young children - were scattered in the debris. Mohsen Hachem stared at the images. "They had to have known there were children in that house," he said. "The drones are always overhead, and those children - there were more than 30 - would play outside all day."

Anger at the attack erupted in Beirut, where windows in the UN building were smashed and its lobby invaded by demonstrators furious at the rising Lebanese death toll. After extensive coverage on Lebanese TV of corpses being taken from the remains of the building, thousands turned out in the city's main open square to vent their fury. Likewise, in Gaza crowds clashed with Palestinian police after smashing into a Unesco building.

Over the border, Israeli leaders expressed sorrow for the civilian deaths, but the military said that Qana had been targeted because Hizbullah had been using it as a base from which to launch rockets. "There was firing coming from there before the air strike. We didn't know there were civilians in the basement of that building," one Israeli defence force spokesman said. He added that rockets had been fired from Qana "in the last few hours" before the air strike.

The strike that destroyed the building was a precision-guided bomb dropped from the air, the same kind of bomb that destroyed a UN position in Khiyam last week, killing four UN observers. Writing on an olive green fragment of the munition which appeared to have caused the explosion read: GUIDED BOMB BSU 37/B.

"We don't know what the people were doing in the basement. It is possible they were being used as shields or being used cynically to further Hizbullah's propaganda purposes," the spokesman said. "We apologise. We couldn't be more sorry about the loss of civilian life."

More than 750 Lebanese, most of them civilians have been killed since Israel began its strikes in response to the kidnapping of two soldiers. A total of 51 Israelis, 18 of them civilians, have been killed.

For Qana, history has repeated itself. Ten years ago, more than a hundred civilians taking refuge in a UN compound there were killed by Israeli shelling.

At the site of the latest tragedy, a man broke down as another small body was brought out, followed quickly by another. The civil defence workers cradled the corpses before placing them delicately on the bright orange stretchers.

"He was the son of Abu Hachem," said a young man in the crowd outside the house. "They're Ali and Mohammed - they're brothers," a neighbour shouted.

At Tyre hospital, Dr Salman Zaynadeen said the casualties were the worst thing he and colleagues had ever faced. Twenty-two bodies were in a refrigerated lorry serving as the hospital's morgue, 12 of them children. "At least 20 more are expected. They range in age up to 75. They were crushed," he said.

Five dead boys lay in the yard outside. Army staff photographed them for identification purposes.

The youngest, Abbas Mahmoud Hashem, lay on his back with his head turned and his right leg drawn up. A dummy hung on a blue plastic chain round his neck; concrete dust covered his face and hair. He looked about 18 months old.

On a hospital bed, a 13-year-old survivor, Nour Hashem, lay fiddling with her bed sheet, her eyes welling with tears. She had been in the house where so many of her family had been killed but had miraculously escaped with only slight injuries.

"We were all sleeping in the same room, my friend, my sister and my cousin," she said, her voice still shuddering.

"I pulled the rubble off my mother and she took me to another house, then she went looking for my brothers and sisters. But my brothers and sisters didn't come and my mother didn't return."

Backstory

The small village of Qana, south-east of Tyre, was a symbol of Lebanon's tragedy before yesterday's air strike. Ten years ago, in remarkably similar circumstances, Israeli artillery shelled a UN compound there, killing more than 100 civilians . The bombardment was part of the Israeli operation codenamed Grapes of Wrath, aimed (then, as now) at punishing Hizbullah for cross-border attacks and dislodging it from the border.

Israel apologised and said it had been an accident caused by old maps and poor calculations. Backed by the US, Israel blamed mainly Hizbullah for using civilians as human shields. But a UN report noted many inconsistencies in the Israeli account and said it was "unlikely" the deaths were the result of technical errors.

-- Ghaith Abdul-Ahad, Jonathan Steele and Clancy Chassay in Qana; Rory McCarthy at the Israel-Lebanon border; Wendell Steavenson in Beirut and Julian Borger in Washington