The attack came as the Sudanese government and rebel delegates met in the Nigerian capital Abuja for AU sponsored negotiations aimed at ending the 34-month conflict in Darfur.
"The African Union special envoy for Darfur and chief mediator, Dr Salim Ahmed Salim, is utterly outraged by the attack on Abu Saruj village in West Darfur," an AU statement said.
The African Union, which has been overseeing a shaky ceasefire between government forces and rebel fighters in the region, added that militiamen raided the village on Monday, leaving behind a trail of death and destruction.
It said that Dr Salim "unequivocally condemns the unwarranted brutal killings of numerous innocent civilians, including women and children, and the destruction of their homes and property by armed militia."
Rebel groups
The two main rebel groups in Darfur, the Sudan Liberation Movement and the Justice and Equality Movement, issued a joint statement, blaming the attack on the notorious Janjaweed militia.
"It was a brutal massacre committed by the government militias (Janjaweed). It was terrorism and destruction," the statement said.
They added that 19 people, including two women and two children, were killed and "more than 45 houses" torched.
The Sudanese government denied any role in the attack, instead blaming "outlaws" based in rebel-held territory.
It said the state governor "condemned the brutal and unjustified incident, visited the village, offered assistance, deployed forces to protect the civilians and notified the AU."
War broke out in Darfur in 2003 when rebel groups began fighting what they say is the political and economic marginalisation of the region's non-Arab ethnic groups by the Arab-dominated regime in Khartoum.
The government responded by unleashing the Arab Janjaweed militias which have been blamed for many atrocities in the conflict that has left as many as 300,000 people dead and more than two million homeless.