UK's Cameron, in Israel, says Israelis have decided to retaliate against Iran

Israel has clearly decided to retaliate against Iran for missile and drone attacks, Britain's foreign minister David Cameron said during a visit to Israel on Wednesday, the starkest warning yet of another volley coming in regional escalation.

World powers are striving to prevent a wider outbreak of conflict in the Middle East after Iran's attacks on Saturday night, which involved hundreds of missiles and drones, the first time Iran has directly attacked Israel after decades of confrontation by proxies.

Iran launched the attacks in response to a presumed Israeli airstrike on its embassy compound in Damascus on April 1, which killed two generals and several other Iranian officers.

More than six months into a war between Israel and the Iran-backed Palestinian militant group Hamas that has seen flare-ups in violence across the Middle East, diplomats are searching for a way to avert direct battle between Israel and Iran.

The Iranian missiles and drones launched on Saturday were mostly shot down by Israel and its allies, and caused no deaths and only minor damage. But Israel says it must retaliate to preserve the credibility of its deterrants. Iran says it considers the matter closed for now but will retaliate again if Israel does.

"It's clear the Israelis are making a decision to act," Cameron told reporters early in his visit to Jerusalem. "We hope they do so in a way that does as little to escalate this as possible."

Washington and other Western governments hope new economic sanctions against Iran will help persuade Israel to limit the scope of its retaliation. Cameron said Britain wanted to see coordinated sanctions against Iran by the Group of Seven big democracies, which are meeting this week in Italy.

"They need to be given a clear unequivocal message by the G7," he said.

Israel is expected to discuss its response to Iran at a meeting of Prime Minister Benjamin Netanyahu's war cabinet, which also includes centrist rivals brought into the government as a unity gesture after Hamas attacked Israel on October 7.

Washington is planning to impose new sanctions targeting Iran's missile and drone programme in the coming days and expects its allies will be following suit, National Security Advisor Jake Sullivan said in a statement on Tuesday.

Earlier, Treasury Secretary Janet Yellen said the United States would use sanctions, and work with allies, to keep disrupting Iran's "malign and destabilising activity".

European Union foreign policy chief Josep Borrell, speaking in Brussels after an emergency video conference of EU foreign ministers, said some member states had asked for sanctions against Iran to be expanded.

Borrell said the proposal would expand a sanctions regime that seeks to curb the supply of Iranian drones to Russia so that it would also include the provision of missiles and could also cover deliveries to Iranian proxies in the Middle East.

'STOP THE WAR! STOP THE WAR!'

Since Hamas fighters precipitated the war in Gaza by attacking southern Israel, killing 1,200 people and capturing 253 hostages according to Israeli tallies, clashes have also erupted between Israel and Iran-aligned groups based in Lebanon, Syria, Yemen and Iraq.

Inside Gaza, Israel has launched a massive air and ground war, with nearly 34,000 Palestinians confirmed killed according to Palestinian medics, and thousands of others feared dead, still lost among the ruins.

Apart from a single week of ceasefire in November during which around half of the hostages were freed, diplomats have so far failed to hammer out terms for a longer truce, much less an end to the war.

This month, Israel abruptly pulled most of its troops out of southern Gaza, site of most of the heaviest fighting since the start of the year. Fighting in recent days has been focused in central Gaza, in the Nusseirat camp north of Deir al-Balah, one of the few areas that Israeli troops have yet to storm.

At a hospital morgue in Deir al-Balah, members of the al-Nouri family screamed in sorrow and anger over bodies in body bags, several the size of small children, in video obtained by Reuters. Authorities said 11 people had been killed in an Israeli strike on the family home on Tuesday.

"Oh people of the world, what is happening is wrong! Have mercy on us! Stop the war! Stop the war! Children are dying in the streets!" a man screamed inside the crowded hospital.

Elsewhere, Hamas media reported Israeli forces had withdrawn from Beit Hanoun in the northern part of Gaza after a 36-hour raid there.

Western countries, including the United States, which initially strongly backed Israel's campaign against Hamas, have grown increasingly uncomforatble with the high civilian death toll and have called for an immediate ceasefire.

Israel says it will not end the fighting until Hamas is annihilated; Hamas says it will not release its hostages without a truce that includes a clear plan to end the war.

With the prospect of famine looming, the United States and Israel say access for aid has dramatically improved this month. Aid agencies say the supplies of food and medicine are still too paltry to stave off humanitarian disaster.