Iran launched an unprecedented drone and missile attack on Israel, the Israeli army announced late Saturday, in a major escalation of the long-running covert war between the regional foes.

Iran's proxies and allies also carried out attacks on Israeli positions as sirens sounded in many places and AFP correspondents heard blasts in the skies above Jerusalem early Sunday.

Iran had repeatedly threatened to strike Israel in retaliation for a deadly 1 April air strike on its Damascus consular annexe and Washington had warned repeatedly in recent days that the reprisals were imminent.

"Iran launched UAVs from its territory towards the territory of the state of Israel," military spokesman Daniel Hagari said in a televised statement.

"We are working in close cooperation with the United States and our partners in the region in order to act against the launches and intercept them," Rear Admiral Hagari said.

People in Jerusalem sought cover, as residents also stockpiled water.

"As you can see it's empty, everybody is running home," said Eliyahu Barakat, a 49-year-old grocery shop owner in Jerusalem's Mamilla neighbourhood.

US President Joe Biden vowed Washington's "ironclad" support for Israel after an urgent meeting with his top security officials on the spiralling crisis.

Iran's Revolutionary Guards confirmed a retaliatory drone and missile attack was under way against Israel in retaliation for the Damascus strike which killed seven Guards, two of them generals.

The Guards said its ballistic missiles were fired almost an hour after the slower moving drones.

Hundreds of Iranians gathered in Tehran's Palestine Square waving Iranian and Palestinian flags to celebrate the unprecedented military action against Israel.

An Israeli army official said Iran had launched more than 200 attack drones and ballistic missiles at Israel.

Iran's allies in the region joined the attack with Yemen's Huthi rebels also launching drones at Israel, according to security agency Ambrey, and Lebanon's Hezbollah movement announcing rocket fire at Israeli positions in the annexed Golan Heights.

The official IRNA news agency said the attack had dealt "heavy blows" to an air base in the Negev desert, but the Israeli army said there had only been minor damage.

'Unfolding' attack

The White House said it expected the attack -- which comes against the backdrop of the six-month Israel-Hamas war in Gaza -- to "unfold over a number of hours".

The Iranian mission to the United Nations warned Washington to keep out of Iran's conflict with Israel.

"It is a conflict between Iran and the rogue Israeli regime, from which the U.S. MUST STAY AWAY!" it said.

But it added that it hoped its action to punish the strike on its diplomatic mission would lead to no further escalation and "the matter can be deemed concluded."

A Pentagon official said US forces were shooting down drones which had been aimed at Israel.

British Prime Minister Rishi Sunak condemned Iran's "reckless" action and pledged his government would "continue to stand up for Israel's security".

The defence ministry said it had moved several additional fighter jets to the region which stood ready to "intercept any airborne attack within range".

France echoed the commitment to Israel's security. "In deciding to take this unprecedented action, Iran has reached a new level of destabilisation," Foreign Minister Stephane Sejourne said.

Egypt, which regularly acts as a mediator between Israel and the Palestinians, said it was in "direct contact with all sides to the conflict to try to contain the situation".

Israel 'prepared'

Shortly before the launches, Prime Minister Benjamin Netanyahu said Israel was prepared for a "direct attack from Iran".

"Our defence systems are deployed, we are prepared for any scenario, both in defence and attack," the Israeli premier said.

Iran's Revolutionary Guards had already seized an Israeli-linked container vessel in the Gulf earlier on Saturday, putting the whole region on alert.

Israel said it was closing schools nationwide while Jordan, Iraq and Lebanon announced they were temporarily closing their airspace.

Israel said it was closing its own airspace from 2130 GMT.

The Israeli military warned Iran it would suffer the "consequences for choosing to escalate the situation any further".

The 1 April strike in Damascus, which killed 16 people, including two Iranian generals, had been widely blamed on Israel. Iran had repeatedly vowed to hit back, but had not specified how.

Iran's Revolutionary Guards seized a container ship "related" to Israel in the Strait of Hormuz on Saturday, which was now heading towards Iranian waters, Iranian state media reported.

The ship's operator, the Italian-Swiss group MSC, said it was working with the relevant authorities to ensure the wellbeing of the 25 crew onboard.

Both Israel and the United States denounced the seizure as piracy, with Israel also demanding that the Guards be declared a "terrorist organisation" by the European Union.

Gaza truce stalemate

The Gaza war began with the unprecedented 7 October attack by Palestinian militants Hamas against Israel which resulted in the deaths of 1,170 people, mostly civilians, according to an AFP tally based on Israeli figures.

Israel's retaliatory offensive has killed at least 33,686 people in Gaza, mostly women and children, according to the territory's Hamas-run health ministry. 

Israel's military said Saturday it had struck more than 30 Hamas targets across Gaza.

In the main central city of Deir al-Balah, fire burned in the rubble of a destroyed mosque.

Israel's military "demanded that the whole area be evacuated" before it was "wiped out in minutes", said Abdullah Baraka, a witness.

Hamas said it had submitted its response to a Gaza truce plan presented by US, Qatari and Egyptian mediators at talks in Cairo this week. 

The Palestinian militant group said it was sticking to its previous demands, insisting on "a permanent ceasefire" and the "withdrawal of the occupation army from the entire Gaza Strip".

During the October attack, Palestinian militants also seized about 250 hostages, 129 of whom Israel says remain in Gaza, including 34 the army says are dead.