(Adds further details from statement) BRUSSELS, Nov 8 (Reuters) - Israel drew fire from the European Union on Wednesday for the deaths of 18 civilians in its shelling of a northern Gaza town, with the EU's external relations chief saying the attack was "profoundly shocking". "The killing this morning of so many civilians in Gaza, including many children, is a profoundly shocking event. Israel has a right to defend itself, but not at the price of the lives of the innocent," Benita Ferrero-Waldner said in a statement. "It is very important for all parties to exercise utmost restraint and limit themselves to actions which are proportionate and in accordance with international humanitarian law," she added. The strike on the town of Beit Hanoun was the deadliest in four years. Palestinian President Mahmoud Abbas described the killings as a "horrible and ugly massacre". Israeli Prime Minister Ehud Olmert's office said he voiced sorrow over the deaths, while a military spokeswoman said Israeli forces had fired shells at north Gaza in response to rockets being launched at Israel. "At this critical juncture all sides have a responsibility to give dialogue a chance," Ferrero-Waldner said in an appeal to kick-start the stalled peace process.