Syria killings are 'pure naked savagery', says Foreign Office minister Alistair Burt. Reuters

Syria's fragile peace process is in shreds after what was claimed to be a regime-backed massacre left 32 children among more than 90 dead and triggered a wave of international revulsion. As UN observers in the central town of Houla confirmed one of the bloodiest death tolls of the 15-month revolt against President Bashar al-Assad, rebels said they were on the brink of abandoning a negotiated plan to end the conflict.

Videos uploaded to the internet and purporting to be from Houla show many dead and badly mutilated infants. Residents say some victims were killed with knives, while many more died from 18 hours of relentless shelling that left buildings wrecked and homes destroyed in a large residential area near the centre of town. Major General Robert Mood, head of the UN team in Syria, described the attack, which began at midday on Friday, as "indiscriminate and unforgivable" but did not say who had been to blame. Syrian state television blamed "terrorist gangs".

The foreign secretary, William Hague, who is to meet his Russian counterpart, Sergei Lavrov, on Monday said Britain would co-ordinate a "strong response" to the massacre. "Our urgent priority is to establish a full account of this appalling crime and to move swiftly to ensure that those responsible are identified and held to account," he said. The Syrian chargé d'affaires has been summoned to the Foreign Office to hear Britain's condemnation of the massacre.

The international community was united in its condemnation. The UN secretary general, Ban Ki-moon, said the killings were a "flagrant violation of international law", while the White House called the violence acts of "unspeakable and inhuman brutality". The secretary general of the Arab League, Nabil Elaraby, said the killings were a "horrific crime" and urged UN action.

Hague's trip to Moscow has been in the diary for some time but the repercussions of the attack on Houla will now be at the top of the agenda. The Foreign Office is concerned that Russia is continuing to arm the Assad regime - a consignment of weapons reportedly arrived by ship on Saturday - and Hague will be urging the Russians to use their leverage over Damascus to get it to comply with the peace plan negotiated in March by the former UN secretary general Kofi Annan.

The atrocity at Houla has left the Annan plan looking in tatters, but the Foreign Office is not willing to write off the plan just yet. Hague had a substantial conversation with Annan on Sunday and Britain has arranged for the UN security council to have an urgent discussion on Syria later this week, possibly on Tuesday or Wednesday.

Tightening sanctions, increasing the number of monitors on the ground and preparing a case for the International Criminal Court are all being discussed as possible options, although there is no agreement yet and no fresh resolutions are expected this week.

Kuwait, which currently heads the 22-member Arab League, announced it is making contacts for holding an Arab ministerial meeting to "take steps to put an end to the oppressive practices against the Syrian people". An unnamed foreign ministry official was quoted by Kuwait's official news agency as condemning the attack in Houla and blamed regime forces for the "ugly crime".

A handout picture released by the Syrian opposition's Shaam News Network shows UN observers at a hospital morgue in Houla. Photograph: Shaam News/AFP/Getty Images

Save the Children's chief executive, Justin Forsyth, joined in the calls for intervention, saying: "This indiscriminate killing must stop now. The world cannot sit back and allow this to happen. Children are suffering terribly in this conflict."

Syrian authorities on Sunday denied responsibility for the massacre. A foreign ministry spokesman, Jihad Makdesi, told reporters in Damascus: "Women, children and old men were shot dead. This is not the hallmark of the heroic Syrian army."

Opposition activists reported fresh shelling on Sunday, with residential districts in Hama and the rebel-held town of Rastan coming under attack from government troops. The UK-based Syrian Observatory for Human Rights also reported clashes between troops and rebels in Hama, in the Damascus suburb of Harasta and in the capital's central Midan district.

With calls mounting for international intervention, the main opposition Free Syrian Army, which, like regime troops had failed to abide by Annan's terms, told al-Jazeera television that unless civilian safety could be guaranteed, the Annan plan was "going to hell".

Annan is due back in Damascus on Monday to discuss the ongoing crisis with key officials.

Ban has warned there is no plan B for the situation, which poses an increasingly grave risk to regional security. Despite the chaos, UN monitors have moved widely around the country and witnessed shootings or explosions almost everywhere they have visited. In some instances, UN convoys have been targeted themselves.

The regime has touted such attacks as evidence of al-Qaida at work, while the Free Syria Army has vehemently insisted that the regime itself has been concocting the attacks in a bid to reinforce its narrative.

"Everywhere [the UN monitors] go, something happens to them," Moustafa Abdul Salam told the Observer in the northern Syrian village of Sarji.

"They want to terrorise them into submission and make them doubt their own instincts. Already you have the Americans saying that al-Qaida might be at work here, so that means the regime are winning. And when they feel that way they will behave even more like savages."

Saturday's UN visit to Houla seemed to be going to script. Monitors, who arrived at about midday, were slow to engage with locals angrily remonstrating at a distance. UN officials also tried to visit Qusair south of Homs. Residents angrily claimed they had turned back for Damascus after gunfire erupted.

"This is the third time they have come here and fled," said one man contacted by Skype. "We know what happens to us if we can ever speak to one of them and they fear that the regime will attack them too."

The uprising has led to a steady unwinding of stability in the iron-clad police state coupled with a sharp rise in violence, especially since opposition groups took up arms in large numbers last August. The Free Syria Army now controls pockets of the country. Though severely under-equipped, it has the capacity to launch hit-and-run attacks against regime forces.