Town in Spain whose destruction 1937 by German bombers during the Spanish Civil War was depicted in one of Picasso's most famous paintings (8)
I believe the answer is:
guernica
(Other definitions for guernica that I've seen before include "piece of art" , "Picasso painting inspired by a bombed town" , "great work of art?" , "Bombed Spanish town inspiring Picasso picture" , "massacre" .)