President Volodymyr Zelensky said after the attack that it was "impossible to reconcile with this cruelty" and urged allies to pile pressure on Moscow to end its nearly three-year invasion.
Oleg Synegubov, governor of the wider Kharkiv region, said 55 people had been wounded in the Russian strike, and that two young women were among the dead.
"They were 18 and 19 years old and one of them was pregnant," he wrote on social media.
An AFP journalist at the scene saw tearful women consoling each other after identifying one of the victims laid out in a body bag lined up by police.
Larysa Chygrynets was at work in the local tax office when she heard the air raid siren sound and then the missile strike seconds later.
"Everything was covered in blood and the windows were smashed," the 51-year-old told AFP of the scenes in her office.
She said that life in Izyum some 40 kilometres (25 miles) from the front line had been relatively calm and that residents had been returning.
"Everything was calm, nothing indicated trouble. We thought everything would be fine by now. But you can see what they have done," she said.
Zelensky said the city council building had been damaged in the attack while Synegubov earlier said a five-storey residential building was hit.
"We need to put pressure on Russia, use as much force as possible -- the force of arms, the force of sanctions, the force of diplomacy -- to stop the terror and protect lives," Zelensky wrote on social media.
Izyum, which had a population of around 45,000 people before the Russian invasion launched in February 2022, was occupied for several months at the beginning of the war before being retaken by Ukrainian forces later that year.
Russian forces are making gains in the region and undoing the advances Kyiv's army made in their 2022 counteroffensive, while stepping up bombardments.
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