UN and Arab League envoy for Syria Kofi Annan has said he is "shocked and appalled" at reports of mass killings in the Syrian village of Tremseh.
The UN said it had confirmed intense fighting including the use of tanks, helicopters and heavy artillery.
The army admitted killing a "big number of terrorists" but said no civilians had died.
Activists initially claimed 200 people including civilians died but later said most of those killed were fighters.
If the death toll in Tremseh is confirmed, it would be the bloodiest single event in the Syrian conflict.
The US, France and UK all condemned the violence and called for co-ordinated action from the UN Security Council.
The mandate for the UN's observer mission to Syria expires on 20 July and council members are locked in debate about a new resolution, which must be passed before the deadline if the mission is to be renewed.
US Secretary of State Hillary Clinton said there was "indisputable evidence that the regime deliberately murdered innocent civilians".
"Those who committed these atrocities will be identified and held accountable," she said.
Reacting to the events in Tremseh, Mr Annan said: "I am shocked and appalled by news coming out of the village of Tremseh, near Hama, of intense fighting, significant casualties, and the confirmed use of heavy weaponry such as artillery, tanks and helicopters.
"I condemn these atrocities in the strongest possible terms."
He said the government had violated the six-point peace plan it agreed to earlier this year.
Mr Annan said UN observers were ready to travel to Tremseh to investigate the killings.
The head of the UN Supervision Mission in Syria (Unsmis), Maj Gen Robert Mood, said this could only take place "when there is a credible ceasefire".
It is unclear what sparked the violence in Tremseh.
Early accounts from activists said government forces surrounded the village on Thursday in a bid to retake it from the rebel Free Syrian Army.
Troops bombarded Tremseh for several hours before pro-government militias from nearby Alawite villages moved in, killing many more villagers and setting fire to houses, activists said.
Others who tried to flee through fields were also gunned down, they claimed.
But later, activists told the AFP news agency that rebel fighters had attacked an army convoy, but were beaten back and many were killed in a counter-attack.
"At this stage, though we do not yet have the final count, the number of civilians killed by shelling is not more than seven," said Jaafar, an activist from the anti-regime Sham News Network.
"The rest were members of the Free Syrian Army."
Activists have posted a video they say shows the bodies of a number of men and boys killed in Tremseh.
However, state media provided a very different version of events.
The Sana news agency quoted military sources as saying terrorist groups had been using Tremseh as a "springboard for their criminal acts".
The army launched a "qualitative operation" after the village's inhabitants had pleaded with them to intervene.
The Sana report said after the "terrorists" were killed, soldiers found the bodies of civilians who had been abducted and killed by the terrorists.
Reports of casualties often cannot be independently verified, as Syria severely restricts journalists' freedom of movement.
Some 16,000 people are thought to have been killed since the uprising against Bashar al-Assad's regime began in March 2011.
Meanwhile, the Wall Street Journal on Thursday quoted intelligence reports as suggesting that Syria was moving its chemical weapons, amid fears the government could use them against rebels or civilians.