"A surprising gap," he said. "But the boys have been working very hard this weekend to bring a couple of new parts to the car. They seem to work."
Hamilton, who had struggled in practice, said he did not expect to be on the front row.
Vettel pleased with pole position
"To be honest I expected to be a lot further back," he said. "We have been struggling all weekend, and we had to make some guesses as to what kind of set-up we wanted and it seemed to work OK.
"The gap is quite big here and it's going to be a tough race here as always."
Hamilton was cleared by the stewards following an investigation into whether he had broken rules forbidding drivers from driving too slowly in the final sector of the lap and held up Mercedes driver Nico Rosberg.
The German said: "There's a rule stating you are not allowed to slow down in those last couple of corners unnecessarily because it's dangerous. Me and [Williams driver Pastor] Maldonado were arriving flat out and Lewis was driving extremely slowly into the last corner, it's a very dangerous situation."
The stewards decided Hamilton should not be penalised as he had not been driving unnecessarily slowly.
Webber was unable to take advantage of Red Bull's improved performance after suffering a series of problems on Saturday.
Webber failed to get out of the first session after his DRS overtaking aid failed. He had earlier missed most of the final practice session with brake problems.
"We had no DRS so that's 1.3 seconds," said Webber, who is only nine points off the world championship lead. "Makes it very difficult. The car has put up a good fight today, we only did four laps today and three of these were in qualifying.
"We put on the soft tyres but we were in a desperate situation, we had to try and get through.
European Grand Prix qualification
Paul Di Resta
"The lap time wasn't too bad with the DRS out. It's a big hit for us, here and Barcelona through no fault of my own, but that's the way it can go in 20 races."
Alonso, who battled for victory in the previous three races, found his car was simply not competitive on the twisty Valencia street circuit.
The Spaniard, two points behind championship leader Hamilton, was just over 0.2secs off the pace in the second part of qualifying, but that was good enough only for 11th place on the grid.
Button was nearly 0.4secs slower than Hamilton and said he struggled with locking his front brakes on his final run and was pessimistic about being able to make any progress in the race.
"We're in Valencia, not a lot happens here in the race. You can't overtake around here.
"If you get it right on the strategy maybe, but the way the tyres seem to hold on for most people it's not going to be the most exciting race. The only person who's will maybe move up is the Lotus in fourth [Grosjean]."
However, the 2009 world champion later took to
Twitter to soften his initial pessimism:
"Hey guys, another tough day. Sorry for my negative comments about Valencia. Now I've calmed down I think there is still a lot to play for on Sunday!"
Michael Schumacher was 12th, failing to get into the top 10 shoot-out after being 0.266secs slower than Rosberg in the second session.
Heikki Kovalainen did an impressive job in the Caterham to beat Toro Rosso driver Jean-Eric Vergne and make it through into the second part of qualifying.
The Finn was not able to make any further progress, however, and will line up 17th.
Did you know?
Sebastian Vettel has led all but one lap in the last two European Grands Prix.
HRT confirmed the steady progress they have been making in recent races with both their drivers out-qualifying the Marussia of Charles Pic.
The Frenchman's team-mate Timo Glock did not take part in qualifying because he was feeling unwell - the German has been battling a stomach upset, but will be able to race on Sunday provided he is cleared by the medical delegate.
European Grand Prix 2012, day three
Sunday, 24 June: Race 12:10 BST; BBC One and BBC One HD, BBC Sport website and BBC Radio 5 live. Race highlights 22:30-23:30; BBC Two.
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