GAZA CITY, Gaza Strip ? Palestinians held up the flag-wrapped body of a two-month-old baby, as tens of thousands marched Tuesday to bury their dead and Hamas vowed revenge after an Israeli air strike killed a top militant leader and 14 others, including nine children.

President Bush called the Israeli missile strike “heavy-handed,” joining other world leaders in sharp criticism of the attack, which leveled an apartment building and destroyed other nearby buildings in a crowded neighborhood of Gaza City overnight.

In a rare U.S. criticism of Israel, White House spokesman Ari Fleischer said, “this heavy-handed action does not contribute to peace.” The office of U.S. Secretary-General Kofi Annan said “Israel has the legal and moral responsibility to take all measures to avoid the loss of innocent life.”

The attack killed Salah Shehadeh, 48, a founder and the top commander of Hamas’ military wing, known as Izzadine el-Qassam, the group said. Israel said Shehadeh was linked to the Islamic militant group’s deadliest suicide bombings, including a March attack at a Natanya hotel that killed 29, and a June 2001 disco bombing that killed 21.

In the streets of Gaza City, mourners carried the bodies in coffins and on stretchers, several of them small children wrapped in Palestinian and Hamas flags. The dead included nine children, ages 2 months to 14 years.

Masked Palestinian gunmen, some in camouflage uniforms, fired automatic rifles into the air.

“The Palestinian reaction will be on the same scale as our loss,” said Abdel Aziz Rantissi, a senior Hamas figure.

In response to the White House criticism, the Israeli Embassy in Washington defended the attack.

“Like the government of the United states, the government of Israel regrets the loss of innocent civilian lives,” spokesman Mark Regev said. “However, our military action against one of the most dangerous Hamas terrorist leaders was a justified action of self-defense.”

The Israeli prime minister hailed the operation.

“This operation was in my view one of our biggest successes,” Ariel Sharon told Cabinet ministers. “We hit perhaps the most senior Hamas figure on the operational side,” Sharon said of Shehadeh, who was jailed first by Israel, and then by the Palestinians, from 1988 to 1999.

Since his release, Shehadeh went in to hiding in Gaza and was responsible for setting Hamas policy for attacks and giving orders to militants who carried them out, Israel said.

Sharon said Israel had “no interest in harming civilians” in the attack. Defense Minister Binyamin Ben-Eliezer issued a statement saying that “the information which we had was that there were no civilians near him.”

However, by firing a powerful missile into a densely packed neighborhood in the middle of the night, civilian casualties were a certainty, Palestinians said.

“I ask the whole world, how can they be silent? Sharon does not want peace,” Palestinian leader Yasser Arafat said.

“This is a war crime that is aimed at destroying all efforts to return stability to the region,” Palestinian Information Minister Yasser Abed Rabbo said. “We warned the Israeli government against attacking civilians. The Israeli government is playing with fire.”

The attack, around midnight, left the apartment building a pile of smoldering rubble. Bedding, kitchen utensils, clothes and children’s toys were strewn about in the debris. Hundreds of residents in the area dug through rubble during the night, searching for survivors.

Haleema Matar, 45, was on the ground floor of the targeted building, while children in her family were sleeping upstairs when the missile hit.

“The children died. If I died it would have been better, I would not have to see this,” she said. Five children in the extended Matar family were killed.

Palestinians gathered in the street near the ruins and outside the hospital where survivors and bodies were taken, demanding revenge on Israel.

“We will kill their children like they killed ours,” shouted one man with a loudspeaker.

Hamas said Shehadeh, his wife, Leileh, their 14-year-old daughter, Iman, and a bodyguard were killed. Shifa Hospital in Gaza City released a separate list of 11 dead, that included eight children, aged 2 months to 11 years, and three adults. The hospital also said that more than 100 people were wounded.

“The Palestinian people will not forget the blood of the martyrs,” said Hamas’ spiritual leader Sheik Ahmad Yassin. “We will let deeds speak.”

The air strike came as Palestinian and Israeli political leaders had been discussing ways to relieve tensions, and there was talk of Israel troops withdrawing from two of the seven West Bank towns they have occupied for more than a month in response to earlier attacks.

Hamas hinted on Monday that it would consider halting suicide bombing attacks if Israel pulled out of the Palestinian areas. However, the missile attack ended any such prospect.

Arab and European nations condemned the missile strike as disproportionate and said it would fuel more violence.

Saudi Foreign Minister Prince Saud al-Faisal, in Cairo for talks with the Egyptian president, demanded “severe punishment” for what he called “a horrible act which will be recorded in history against Sharon.”

Egypt’s foreign minister, Ahmed Maher, accused Israel of deliberately targeting civilians and inflaming tensions and called on the United States to “stop such Israeli behavior.”

In other violence, five Palestinian militants were killed in clashes with the Israeli army, bringing the overall Palestinian death toll for the day to 20.

Two Palestinians were killed during an exchange of fire Tuesday morning on the edge of the Gaza Strip, the army said. The militant group Islamic Jihad said its members carried out the attack.

Near the West Bank city of Nablus, three Palestinian gunmen, disguised in Israeli military uniforms, died in a gun battle, the army added.

In nearly 22 months of Mideast fighting, more than 1,780 people have been killed on the Palestinian side and 778 on the Israeli side.