The UN Security Council held an emergency session this evening on the crisis triggered after Israeli navy commandos stormed a Gaza-bound aid flotilla.
Many of the Security Council members condemned Israel's attack on the flotilla.
Turkish Foreign Minister Ahmet Davutoglu told the meeting that Israel has 'lost all legitimacy' after the attack.
Britain, France, Russia and China called for the Israeli blockade of Gaza to be lifted and for an independent inquiry.
US deputy permanent representative Alejandro Wolff said Washington was 'deeply disturbed by recent violence and regrets tragic loss of life and injuries. We are working to ascertain the facts.'
'We expect a credible and transparent investigation and strongly urge the Israeli government to investigate the incident fully,' Mr Wolff said.
Israel's UN envoy Daniel Carmon insisted that the flotilla was not on an aid mission.
He asked: 'What kind of humanitarian activists demand to bypass the United Nations, the Red Cross, and other internationally recognised agencies?
'What kind of peace activists use knives, clubs and other weapons to attack soldiers who board a ship in accordance with international law?'
UN Secretary General Ban Ki-moon earlier condemned the killings, saying a full investigation is vital.
The European Union has called for an immediate inquiry into the deaths and urged Israel to allow the free flow of humanitarian aid to Gaza.
EU High Foreign Policy Representative Catherine Ashton said: 'The EU condemns the use of violence that has produced a high number of victims among the members of the flotilla and demands an immediate, full and impartial inquiry into the events and the circumstances surrounding them.
'The EU does not accept the continued policy of closure. It is unacceptable and politically counterproductive. We need to urgently achieve a durable solution to the situation in Gaza.'
She was speaking after an emergency meeting of member states' envoys to Brussels to discuss the incident.
Israeli Prime Minister Benjamin Netanyahu has cancelled plans to meet US President Barack Obama in Washington tomorrow.
Mr Netanyahu voiced regret at the deaths, but insisted a blockade of Gaza would go on.
He said: 'Regrettably, in this exchange, at least 10 people died. We regret this loss of life.'
He added that Israeli forces had 'to defend themselves to defend their lives'.
Mr Obama told Mr Netanyahu that it was important to find out 'all the facts' of the raid as soon as possible.
Former British Prime Minister Tony Blair, who is the Quartet Representative in the Middle East, said: 'I express deep regret and shock at the tragic loss of life.
'There obviously has to be a full investigation into what has happened.
'Once again I repeat my view that we need a different and better way of helping the people of Gaza and avoiding the hardship and tragedy that is inherent in the present situation.'
Israel accused of state 'terrorism'
Turkish Prime Minister Tayyip Erdogan accused Israel of state terrorism following the deaths.
He said: 'This action, totally contrary to the principles of international law, is inhumane state terrorism.'
'Nobody should think we will keep quiet in the face of this,' Mr Erdogan told reporters from Chile, where he was cutting short an official visit to Latin America to deal with the crisis.
Turkey has recalled its ambassador, while Israel is advising citizens to postpone planned travel to Turkey.
The Arab League has called an emergency meeting for tomorrow to discuss the situation.
UK Foreign Secretary William Hague has deplored the loss of life and said the British embassy was in contact with the Israeli government, asking for more information.
He said: 'I deplore the loss of life during the interception of the Gaza flotilla. Our embassy is in urgent contact with the Israeli government.
'The closure (of access to Gaza) is unacceptable and counter-productive. There can be no better response from the international community to this tragedy than to achieve urgently a durable resolution to the Gaza crisis.'
'Very serious' incident
Taoiseach Brian Cowen has said he believes the blockade action taken by Israeli defence forces is a violation of international law.
He said he regarded the incident as 'very serious'.
Speaking in Dublin this morning, Mr Cowen said people were entitled to receive humanitarian assistance.
He said he questioned under what legal basis the Israeli Defence Forces had boarded ships on a humanitarian mission in international waters.
Mr Cowen said an international investigation into the events of last night was essential. He added that he considered the action taken by the Israeli army to be disproportionate.
Earlier, Israel's Deputy Prime Minister Danny Ayalon said the Israeli action had been justified and he accused the activists on board of being armed.
Spokesman for the Israeli Prime Minister Mark Regev said the incident was regrettable, but he claimed the activists were themselves responsible.
Fianna Fáil TD Chris Andrews, Sinn Féin TD Aengus O'Snodaigh and Senator Mark Daly were prevented from joining the flotilla from Cyprus over the weekend.
Mr Andrews said: 'This attack is totally unacceptable and disproportionate.
'We are calling for an urgent meeting of all EU foreign ministers to discuss appropriate courses of action in response to Israel's complete disregard for the safety of our citizens and their defiance of international law.
'The events of the past day are a troubling and sinister development and we are of the view that immediate action needs to be taken both at domestic and international level.'