"We have to assume that a high proportion of those killed and injured will have been British," Hammond said after chairing a meeting of the U.K. government's crisis committee, COBRA.
Hammond added that his office is reviewing changes to its advice for British nationals traveling in the area.
Dhishallah Fredg told NBC News that he saw a gunman take out a machine gun that had been hidden behind a sun umbrella and open fire on the beach-goers.
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"I saw people running from the beach running, screaming...trying to reach the reception of the hotel, trying to find a place to escape," said Fredg. "You can't imagine the fear people had in their eyes."
Fregh—who manages the El Mouradi Palmarina Hotel, which is next door to the Imperial Marhaba—estimated he was around 100 feet from the gunman.
RIU Hotels & Resorts, which runs the Imperial Marhaba, confirmed in a statement that its hotel was involved in the attack and extended its "sincere condolences to the victims and their relatives."
The deadly assault came just hours after an apparent terror attack on a factory in France. French President Francois Hollande telephoned Tunisian President Beji Caid Essebsi to express solidarity in light of the Sousse attack, according to Hollande's office.
An Irish woman believed to be in her 50s was among the dead, Ireland's Foreign Minister Charlie Flanagan told a press conference. A spokesman for Belgium's foreign ministry told NBC News by text message that at least four Belgians had been wounded. The spokesman did not provide further details.
The nationalities of the other victims were not immediately clear, but Sousse—located around 90 miles from the capital of Tunis—is popular with European tourists.
The U.S. Embassy in the capital, Tunis, said that "as far as we know" there were no U.S. nationals among the victims.
German Foreign Minister Frank-Walter Steinmeier condemned the "cowardly assassination attack against tourists" but said he did not know if any of his countrymen were among the victims.
Gary Pine, a product manager from the U.K., told NBC News he was one of dozens of vacationers on the beach when the attack took place not far from his hotel, the El Mouradi Palm Marina.
He said he initially thought he was hearing firecrackers but that "it was only when you could hear the bullets whizzing through the air that we realized it was gunfire." His 22-year-old son saw one person get shot, Pine added.
He said guests started running off the beach and were told to go to their rooms by hotel staff, he said. Some guests ran back out onto the beach to get their room keys, he added.
"The easiest way to describe it is utter panic," Pine said. "People were fleeing in all different directions. They were trying to make their way as fast as they could back up to the hotel."
British holidaymaker Karen Hillman said she was near her hotel's pool when other guests started rushing toward the building "like a stampede."
"Everyone was told to get inside the hotel and into the rooms," she added.
The entertainment manager at the hotel, who only gave his first name, Hamouda, said guests had told him two gunmen "came from the sea" and attacked the beach. He confirmed that staff had told guests to hide in their rooms.
There was no immediate claim of responsibility for the attack, which occurred during the holy month of Ramadan.
The violence had an almost immediate impact on the country's tourism industry, which has been struggling in wake of a deadly terror attack in March which left several tourists dead.
Belgian airline Jetairfly said on Twitter that one of its Boeing 737s en route from Brussels had turned back "due to current terrorist attack." The aircraft had been due to land in the Tunisian town of Enfidha, about 25 miles north of Sousse, before it turned around more than halfway into its journey.
In March, an attack on Tunisia's National Bardo Museum left 22 people — mainly foreigners — dead. ISIS purportedly claimed responsibility for the assault, in which Japanese, Polish, Italian and Spanish nationals were killed, before two of the assailants were died in a firefight with police.
Tunisia has been held up as a rare example of democracy being successfully delivered after the Arab Spring of 2011.
The country's warm weather, beaches, historic culture and nightlife have made it a popular holiday destination for Europeans, with 7 million tourists arriving each year, according to Lonely Planet.