Israel has made significant progress in preparations for the evacuation of around 1 million civilians from Rafah ahead of the Israeli military’s impending operation in the southern Gaza city, according to an Israeli source.

Preparations have been ongoing for over a month, including repairing water and sewage pipes and amassing thousands of tents, the source said.

There are around 1.5 million Palestinians estimated to be in the Khan Younis and Rafah areas in southern Gaza. It’s believed around 1 million people would evacuate north. The evacuation process, which could take weeks, would not start until after Passover.

State Department principal deputy spokesperson Vedant Patel stressed to reporters that "any kind of forced relocation or displacement of the Palestinian people within Gaza cannot and should not be part of any plan or an operation."

-ABC News’ Matt Gutman and Anne Flaherty

U.S. and Israeli officials will hold a high-level, virtual meeting on Thursday about alternative plans for an Israeli military operation in Rafah, a White House official confirmed to ABC News.

The official said that it will be a secure video meeting that will follow up on discussions from earlier this month. National security adviser Jake Sullivan will lead the meeting for the U.S. side, the official said.

The meeting was first reported by Axios.

"The main purpose really is to talk about Rafah ... and also share our continued concerns over a major ground offensive there," White House National Security Communications Adviser John Kirby said.

-ABC News’ Michelle Stoddart

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.

Iran has launched dozens of drones toward Israel, but it could take hours for them to reach, according to Israel Defense Forces spokesperson Daniel Hagari.

Israel is closing down its airspace after midnight local time and Israel's defense systems are deployed, according to Prime Minister Benjamin Netanyahu.

"We are prepared for any scenario, both in defense and attack," Netanyahu said in a video statement.

"The IDF is on high alert and is constantly monitoring the operational situation. The IDF Aerial Defense Array is on high alert, along with IAF fighter jets and Israeli Navy vessels that are on a defense mission in Israeli airspace. The IDF is monitoring all targets," the IDF said in a statement.

"We ask the public to adhere to and follow the instructions of the Home Front Command and the official IDF announcements regarding the matter," the statement added.