If confirmed, it would be one of the deadliest air strikes of Syria's civil war.
More than 90 people were killed, the opposition Local Coordination Committees of Syria said, and the death toll could still rise. An activist who lives in Halfaya told CNN more than 100 people were killed.
"There were dozens of dead thrown in the street. The residents were shocked and in a state of fear. It was chaotic," Mahmoud Alawy said.
"There is no way to really know yet how many people were killed. When I got there, I could see piles of bodies all over the ground. There were women and children," Samer al-Hamawi, an activist in the town of Halfaya, told Reuters earlier. "There are also dozens of wounded people."
"We hadn't received flour in around three days so everyone was going to the bakery today, and lots of them were women and children. I still don't know yet if my relatives are among the dead."
Rami Abdelrahman, of the London-based Syrian Observatory for Human Rights, also said the death toll was still very unclear:
"From looking at the videos, I expect the death toll to be around or above 50, and not higher than 100. But for now I am keeping my estimate at dozens killed, until we have more information."
Halfaya, in the central province of Hama, had been seized by rebels last week in a push to seize new territory in their 21-month-old revolt against President Bashar al-Assad.
Another activist said residents picking through the bodies were still determining which were wounded and which were dead.
Hamawi, who spoke to Reuters via Skype, uploaded a video of the scene that showed dozens of dust-coated bodies lined up near a pile of rubble beside a concrete building with blackened walls.
Screams could be heard in the video as some men rushed to the scene on motorcycles and other residents limped away. Dozens of dead bodies could be seen.
The authenticity of the video could not be immediately verified, as the government restricts access into Syria.
Activists said more than a thousand people had been lined up at the bakery in Halfaya. Shortages of fuel and flour have made bread production erratic across Syria, and bread lines are often hours long.
Rebels have been clashing with government forces in recent days in the region around Halfaya, some 25 kilometers (15 miles) northwest of Hama, most notably in the village of Morek, the Associated Press reports. Activists say rebels have taken over a number of regime checkpoints there as part of an effort to control the country's main north-south highway.
The Syrian Observatory for Human Rights, said there had been other air strikes on Sunday, including one on the town of Safira in northern Aleppo province, which killed 13 people, the BBC reported.
The Observatory also reported that jets had struck the town of Saqba, just north of Damascus.
Meanwhile, Assad's information minister, Umran Ahid al-Za’di, distanced the government Sunday from comments by the vice president that neither side could win the civil war.
Last week Vice President Farouq al-Sharaa said in a newspaper interview that the country needed a government of national unity since neither side could win militarily.
"There are 23 million people in Syria with their own personal opinions, this was one of those 23 million," the information minister, Umran Ahid al-Za'bi, told a news conference in the Syrian capital Damascus.
Sharaa, a Sunni Muslim in a power structure dominated by Assad's Alawite minority, has rarely been seen since the revolt began in March 2011 and is not part of the president's inner circle.
Za'bi told journalists that the Syrian army was still strong, despite a string of rebel advances and seizures of military sites across the country. He said that many reports of rebel gains were "fantasy, media victories."
"I have general advice to those political powers that reject dialogue: Time is getting short. Hurry and move on to working on a political solution," he said.
"These military efforts to try to topple the government, of getting rid of the president, of occupying the capital ... forget about this. That is my advice."
The minister also said Syria would never use chemical weapons, if it had them, anywhere inside or outside the country. It was the first time a government minister clearly stated that there were no intentions of using chemical arms in any capacity.
International envoy Lakhdar Brahimi was in Damascus Sunday to push for a negotiated solution to the conflict. He arrived from Beirut over land since the Damascus airport has been under fire. Previous efforts have proved fruitless.
Activists say more than 44,000 people have been killed in the 21 months.