The US and UK on Thursday announced new sanctions on Iran's drone programme in response to its aerial attack on Israel.
US President Joe Biden said the sanctions and export controls were intended to “further degrade Iran’s military industries”.
The G7 countries were plotting a joint response at talks on the Italian island of Capri on Thursday, with Israel being urged not to overreact.
The EU's foreign and security policy chief Josep Borrell said the message to avoid escalation was being passed to Israel “clearly” but without “loudspeaker diplomacy”.
He rejected the suggestion that Israel could hold back in exchange for a green light to attack the civilian refuge of Rafah in southern Gaza.
UN Secretary General Antonio Guterres warned Gaza was turning into a “humanitarian hellscape”, as he raised fears the tensions could mount into a “full-scale regional conflict”.
Iran attacked Israel on April 13 with a barrage of drones and missiles that were mostly intercepted by Israeli, US and allied forces. Tehran called it a retaliation for a strike against its consulate in Damascus on April 1.
Although Iran is heavily sanctioned already, diplomats in Europe want measures linked to its drone supply to Russia to be widened to cover its activities in the Middle East.
Iran's attack “carried with it a serious risk of thousands of civilian casualties and wider escalation for the region,” Britain's Foreign Secretary David Cameron said at the G7 talks in Capri.
The US was first to announce new sanctions, aimed at 16 people and several companies allegedly linked to Iran's drone production.
Those affected “work on behalf” of the Quds Force, a branch of Iran's Islamic Revolutionary Guard Corps, the US Treasury Department said.
One of those targeted is Mohammad Sadegh Abutalebi, the chief executive of Iranian company Mado which makes engines for Shahed combat drones.
Several members of the Quds Force described as senior figures active in drone deployment to Iraq, Yemen and Syria have also had sanctions imposed.
There are also efforts to curb Iran's steel sector, with five companies sanctioned, and limit exports of basic microelectronics.
“Less than a week ago, Iran launched one of the largest missile and drone attacks the world has ever seen against Israel,” Mr Biden said.
“We helped defeat this attack. And today, we are holding Iran accountable – imposing new sanctions and export controls on Iran.”
The UK's sanctions hit seven people and six entities including the IRGC's naval forces and the general staff of its armed forces.
Iran's Defence Minister Mohammad Reza Ashtiani is the subject of personal sanctions along with aerospace industry chief Seid Mir Ahmad Nooshin.
Also sanctioned is Maj Gen Gholamali Rashid, believed to be the head of a central Iranian military command.
“Today we have sanctioned the ringleaders of the Iranian military and forces responsible for the weekend’s attack,” UK Prime Minister Rishi Sunak said.
“These sanctions – announced with the US – show we unequivocally condemn this behaviour and they will further limit Iran’s ability to destabilise the region.”
Sanctions mean the people concerned cannot travel to the US or UK and any assets they have there are frozen.
