Turkey shelled Syria in retaliation for cross-border fire that killed five of its nationals, in a sharp escalation of tensions between the neighbors.

Prime Minister Recep Tayyip Erdogan's cabinet, furious about the attack, was set to seek clearance for possible future cross-border military operations at a special parliament session Thursday morning.

Turkish shelling meanwhile continued after nightfall, media reports said.

NATO and major Western powers condemned Damascus for hitting a Turkish border town, the first attack to kill Turkish citizens, which claimed the lives of a woman and three children. The Pentagon denounced the attack as "depraved".

Erdogan said after the shells hit Akcakale town on Wednesday afternoon that "our armed forces in the border region immediately retaliated against this heinous attack... by shelling targets spotted by radar.

"Turkey will never leave unanswered such provocations by the Syrian regime targeting our national security, in line with engagement rules and international law," his office said in a statement.

NATO, in an emergency evening meeting at Brussels headquarters, condemned the attack against member-state Turkey and called on Syria to respect international law.

The incident was the most serious between the neighbors since June, when Syria shot down a Turkish fighter plane with the loss of its two-man crew and Ankara took the matter to NATO.

Private station NTV reported that on Thursday the government would seek approval from parliament for cross-border military operation in Syria "when deemed necessary".

Any such new mandate would be valid for one year, reports said.

Under the constitution, any such operation now requires the authorization of parliament.

NATO said that it stood by Turkey and "urges the Syrian regime to end flagrant violations of international law."

Syria's "recent aggressive acts at NATO's southeastern border" were a "flagrant breach of international law and a clear and present danger" to an ally, it said.

Turkish regional governor Celalettin Guvenc earlier told Anatolia news agency that "three or four Syrian shells fell inside Turkey at around 4:30 pm local time... and one of them hit a house. As a result, we unfortunately lost our five citizens."

Ten others were wounded and two of them were in critical condition, he said.

Activists in the Syria conflict confirmed that Turkey quickly hit back at Syrian army positions.

"Syrian tanks in Raqa province shelled Tal al-Abyad on the (Syrian side of the) border, and some of the shells fell on Turkish territory," a Raqa-based activist who identified himself only as Wael told AFP via the Internet.

"The Turks then fired shells in response," he added. His account was corroborated by another activist and the Syrian Observatory for Human Rights.

"The last incident went too far," Turkey's Deputy Prime Minister Bulent Arinc was quoted as saying by Anatolia. "NATO treaty articles bring about certain liabilities when one of its members is attacked.

"We will not be blinded by rage, but we will protect our rights to the end in the face of an attack on our soil killing our people."

US Secretary of State Hillary Clinton said: "We are outraged that the Syrians have been shooting across the border. We are very regretful about the loss of life on the Turkish side."

She would discuss with her Turkish counterpart "the best way forward" for what was a "very, very dangerous" situation, she added.

Pentagon spokesman George Little said: "This is yet another example of the depraved behavior of the Syrian regime, and why it must go."

UN chief Ban Ki-moon told Damascus to respect its neighbors' sovereignty.

France also condemned the attack and affirmed its full support and solidarity with its Turkish ally, while British Deputy Prime Minister Nick Clegg said: "We condemn all violence by the Syrian regime and demand that it avoids any repetition of today's incident".

Syria was looking into the origin of the deadly cross-border shelling, its Information Minister Omran Zoabi said in a statement reported by state television.

"Syria offers it sincere condolences to the families of the victims and to our friends the Turkish people," he added.

The minister reiterated his government's charges that it is battling foreign-backed "terrorists," whom it has frequently accused Ankara of training and financing.

Relations between Syria and Turkey have steadily deteriorated since the uprising against Syrian President Bashar al-Assad's regime broke out in March 2011. Monitoring groups say the conflict has claimed more than 31,000 lives.

Akcakale town has been hit by Syrian fire several times recently and schools have been shut over the past two weeks. A week ago, the Turkish army deployed artillery and anti-aircraft missiles along the border in the region.

Since late July, Syrian rebels have seized control of at least three key border crossings with Turkey and others on the eastern border with Iraq. (AFP)