The US and Britain on Thursday imposed a new round of sanctions on Iran as concern grows that Tehran’s unprecedented attack on Israel could fuel a wider war in the Middle East.

The US Treasury's Office of Foreign Assets Control targeted 16 people and two entities in Iran that produce engines which power the drones used in the April 13 attack on Israel. Additionally, Britain is targeting several Iranian military organisations, individuals and entities involved in Iran’s drone and ballistic missile industries.

“We will continue to deploy our sanctions authority to counter Iran with further actions in the days and weeks ahead," US Treasury Secretary Janet Yellen said in a statement.

The action comes after US officials earlier this week warned that they were readying new sanctions in response to Iran’s activity in the region and to prevent future attacks. Lawmakers on Capitol Hill also have been quickly pushing forward legislation that would financially punish the Islamic Republic and its leaders.

Tehran says it launched the April 13 attack in retaliation for Israel's suspected April 1 strike on the Iranian consulate in Damascus. Israel has said it will retaliate, while a senior Iranian Revolutionary Guards commander on Thursday said Iran could review its "nuclear doctrine" following Israeli threats. (AP/Reuters)