BRUSSELS, Apr. 17 (Reuters) - European Union leaders decided on Wednesday to step up sanctions against Iran after Tehran's missile and drone attack on Israel left world powers scrambling to prevent a wider conflict in the Middle East.

The summit in Brussels is the first meeting of the EU's 27 national leaders since Saturday's attack, more than six months into the war between Israel and the Iran-backed Palestinian militant group Hamas.

Israel has signalled it will retaliate but has not said how. EU leaders condemned the Iranian attack, reaffirmed their commitment to Israel's security and called on all sides to prevent more tensions, including in Lebanon.

"We feel it's very important to do everything to isolate Iran," said summit chairman Charles Michel, adding the new sanctions against the Islamic Republic would target companies involved in the production of drones and missiles.

German Chancellor Olaf Scholz said it was important that Israel "does not respond with a massive attack of its own."

Italy spoke separately ahead of G7 talks in favour of sanctions against arms suppliers linked to the attack against Israel, as well as those behind attacks on ships in the Red Sea.

Iran launched its assault in response to an April 1 strike on its embassy in Damascus which it blamed on Israel. Tel Aviv started its broader military offensive in Gaza after Hamas' deadly attack on Israel on Oct. 7.

Photo from Reuters