UN observers in Syria have described an attack on a village in the Hama region in which about 220 people were reported killed as part of a continuing Syrian air force operation.

"The situation in Hama province continues to be highly volatile and unpredictable," a so-called "flash report" from the UN observer mission said.

"SAAF forces continue to target populated urban areas north of Hama City in a large scale," the report said, referring to the Syrian Arab Air Force.

Opposition sources said about 220 people, mostly civilians, were killed in the village of Tremseh when it was attacked by helicopter gunships and tanks then stormed by militiamen who slaughtered some families yesterday.

"The operation in Tremseh is assessed as an extension of the SAAF operation in Khan Sheikhoun to Souran over the recent number of days," said the two-page report by the UN mission in Syria, known as UNSMIS.

There were no independent accounts of the number of dead or how they were killed. 

If scores of civilians were killed, it could make it the worst atrocity in 16 months of fighting between rebels and the forces of President Bashar al-Assad.

According to the UNSMIS report, a patrol of unarmed UN military observers could get within only about 6km of Tremseh before being stopped by SAAF commanders because of "military operations."

The patrol observed the situation from a few different locations around Tremseh for about eight hours during which time it heard more than 100 explosions, sporadic small arms and heavy machinegun fire and saw white and black smoke plumes.

It saw one Mi-8 and two Mi-24 helicopters and witnessed one of the Mi-24 helicopters firing air-to-ground rockets.

"The patrol received several calls from local contacts claiming 50 people had been killed and 150 wounded within Tremseh," the report said.

"Attempts to contact the local military commander during this period were unsuccessful," it said.

"Patrols attempted to access Tremseh via alternate routes without success."

The report said the UN mission made further attempts to get a local ceasefire to allow the evacuation of civilians from Tremseh by contacting the Hama Governorate chief of police and the SAAF senior national liaison officer, but did not succeed.

The UN observers said they also saw several civilian trucks and cars moving through the area carrying armed men wearing a mix of military and civilian clothing and 10 ambulances, one of which was transporting an armed person.

UNSMIS was deployed to Syria in April to monitor a failed truce as part of international envoy Kofi Annan's peace plan.

The UN Security Council must decide the future of the mission before July 20, when its initial 90-day mandate expires.

In a letter to the Security Council today, Mr Annan said the massacre in Tremseh showed that UN resolutions on Syria were being ignored, making it imperative to signal that there would be consequences.

In a letter to the Security Council UN Secretary-General Ban Ki-moon called it an "outrageous escalation of violence."

Russia has proposed extending the UN mission for 90 days, but Britain, the United States, France and Germany have countered with a draft resolution to extend it for 45 days and place Mr Annan's peace plan under Chapter 7 of the UN Charter.

Chapter 7 allows the council to authorise actions ranging from diplomatic and economic sanctions to military intervention.

US officials have said they are talking about sanctions on Syria, not military intervention.

The Western-backed draft resolution in particular threatens the Syrian government with sanctions if it does not stop using heavy weapons and withdraw its troops from towns and cities within 10 days of the adoption of the resolution.

Russian Deputy UN Ambassador Alexander Pankin said yesterday that Moscow was "definitely against" Chapter 7.

Russia - a key Syrian ally - and China previously vetoed UN resolutions designed to pressure Assad.

UN chief Mr Ban has recommended shifting the emphasis of the work of UNSMIS from military observers to civilian staff focusing on a political solution and issues like human rights.

UNSMIS suspended most of its monitoring activity on 16 June due to increased risk from rising violence.

While the mandate for 300 unarmed military observers is likely to be unchanged, diplomats said they have been told that only half the number would be required for the suggested shift in focus of the mission.

The others would return to their home countries, but be ready to redeploy again at short notice.