Israel-Gaza updates: 22, including 18 children, reported dead in Rafah strikes

The U.S. is sanctioning two groups and 16 people it says enabled Iran's drone production following Iran's attack on Israel last weekend.

"Today, in coordination with the United Kingdom and in consultation with partners and allies, we are taking swift and decisive action to respond to Iran’s unprecedented attack on Israel," Treasury Secretary Janet Yellen said. "We’re using Treasury’s economic tools to degrade and disrupt key aspects of Iran’s malign activity, including its UAV program and the revenue the regime generates to support its terrorism."

The Treasury Department said it’s sanctioning Khuzestan Steel Company, Iran's largest steel producer. The Treasury Department said Iran's metals sector generates "several billion dollars in revenue annually."

The U.S. is also targeting the Iranian carmaker Bahman Group for its role in making vehicles used by the Islamic Revolutionary Guard Corps for military operations.

The sanctions also target people who work for Iran-based drone manufacturers, including executives of the Mado Company, which the U.S. says produced drone engines used in Iran's Shahed UAVs. The U.S. also sanctioned members of the IRGC who it says help supply proxy groups, like the Houthis in Yemen, with drones that have attacked U.S. service members in the Red Sea.

Yellen added that the U.S. would "continue to deploy" sanctions to counter any further action by Iran, with the goal of making it harder and more expensive for Iran to undertake destabilizing actions.

President Joe Biden said in a statement that these sanctions are "holding Iran accountable."

Biden emphasized that the sanctions are in coordination with the international community, and he said the other G7 countries are committed to increasing "economic pressure" on Iran alongside the U.S.

Biden said he has instructed his team to continue to impose sanctions that will degrade Iran's military capabilities.

Biden also reiterated his ironclad support for Israel, and issued a warning to Iran and those who "enable" Iran's attacks.

"We are committed to the security of our personnel and partners in the region," Biden said. "And we will not hesitate to take all necessary action to hold you accountable."

-ABC News’ Michelle Stoddart and Justin Gomez

Israel is unlikely to carry out a strike on Iran until after Passover, a senior U.S. official told ABC News, although that could always change.

Passover begins on Monday and ends after nightfall on April 30.

The Iranian Islamic Revolutionary Guard Corps and other leadership are still on a high state of alert, with some in safe houses and underground facilities, the official said.

Israel prepared for and then aborted retaliatory strikes against Iran on at least two nights this past week, three Israeli sources told ABC News.

Iran attacked Israel with more than 300 drones and missiles on Saturday night into Sunday morning local time in Israel. Israel has been weighing how and when to respond to Iran's attack since then, holding war cabinet meetings on Sunday, Monday and Tuesday.

The members of the Israeli war cabinet are Israeli Prime Minister Benjamin Netanyahu, Minister Benny Gantz and Defense Minister Yoav Gallant.

A range of responses have been presented to the Israeli war cabinet. The potential responses include options ranging from attacking Iranian proxies in the region but not on Iranian soil to a potential cyber attack, sources told ABC News.

There was no war cabinet meeting on Wednesday, but Netanyahu told his government cabinet that while he appreciates the advice from allies, Israel will "make our own decisions, and the State of Israel will do everything necessary to defend itself."

-ABC News' Matt Gutman and Jordana Miller

Iranian President Ebrahim Raisi said at an army parade Wednesday that "the tiniest invasion" from Israel will be met with a "very massive and harsh response."