The BBC “got it wrong” by not giving prominence to the massacre of the Fogel family by Palestinians in the West Bank settlement of Itamar, the outgoing director-general has admitted.

Mark Thompson was quizzed by Conservative MP Louise Mensch, who made various complaints to the BBC about the coverage, at a Culture, Media and Sport Select Committee hearing on Tuesday. Mrs Mensch said the BBC’s decision not to include the story as part of its rolling news coverage generated “the most reaction I have ever had in all my time in politics.”

She said: “The BBC ran the story on Radio 4 and a lead item on the website but they never subsequently touched it in broadcast or on the 24-hour rolling news programme on BBC News 24. I only found out, after the event, from an American blog, called “Dead Jews is no news” and the more I went into it, the more shocked I was.

“I was overwhelmed by response from the Jewish community both here and abroad. There was a feeling the BBC just didn’t care and that, if a settler had entered the home of a Palestinian family, slit the throat of their children, that the BBC would have covered that.”

Mrs Mensch had subsequently received an apology from BBC News’s Helen Boaden but wanted Mr Thompson’s reassurance about the BBC’s “even-handedness” on the Middle East conflict.

Mr Thompson said the story had come during a “very busy news period” including the fighting in Libya and the tsunami in Japan.

“News editors were under a lot of pressure,” he said. “Having said that, it was certainly an atrocity which should have been covered across our news bulletins that day.”

But he added: “I don’t believe that should be taken as systemic bias. We try very, very hard… to reflect suffering on both sides of that conflict. When there has been a humanitarian incident in Gaza, we try to show the effects of rockets in Sderot.”

He said he stood by his decision not to have shown the DEC humanitarian appeal for Gaza during Operation Cast Lead. “I believe I was right, many people thought I was wrong. It might have given the impression we were more sympathetic to one side of that dispute than the other. Israel and Palestine, like Kashmir and Sri Lanka, are so hot in terms of people’s sensitivity.

“But I do want to say, to all our audience including our Jewish and Israeli audiences here and around the world, we do want to make sure we are fair and impartial. We made a mistake in this instance.”

Mrs Mensch said after the meeting that she was extremely pleased with Mr Thompson’s response. “I was very satisfied with his frank admission, He understood how this had affected the Jewish community.”