This is common. Your stem has broken, as in this picture http://en.wikipedia.org/wiki/Gate_valve:
This diagram shows more detail> http://www.vma.org/AboutValves/Galle...Types.asp#Gate
As you turn the handle, the stem does not move up and down...it is fixed. But is is threaded on the end, so the gate moves up and down on the stem, just as if you were screwing a nut on a bolt.
If you can turn off the main upstream of the broken valve, you can unscrew the bonnet assemby, and with needlnose pliers can probably reach in and just remove the gate, then screw the bonnet back on. Now you will have water in the house, but should get that valve replaced as soon as possible. Don't count on repairing it, because parts from one brand, or even new vs old, are often not interchangeable. Better to replace it with a ball valve.