US President Joe Biden said Tuesday he had decided on a response to a drone strike that killed three American troops in Jordan, while insisting he did not want a wider war in the Middle East.

Facing growing pressure in a US election year, Biden said he held Iran responsible for supplying the weapons to the people who carried out the deadly attack on a military base.

The White House warned that "multiple actions" were likely in retaliation for the first fatal attack on US forces in the region since the Israel-Hamas war broke out in October.

Nothing can "replace or substitute" the UN Palestinian refugee agency, whose staff were implicated in the Hamas attacks on Israel, the UN's coordinator for Gaza aid said Tuesday even as Israel made new claims against it.

Several countries, including the United States, Britain, Germany and Japan, have suspended funding to the UNRWA agency, and the UN Secretary-General Antonio Guterres was holding crunch talks with donor countries.

The Israeli army said Tuesday it is channelling water into Gaza's tunnels in a bid to destroy the sprawling underground network used by Hamas militants to launch attacks on Israel.

"It is part of a range of tools deployed by the IDF (Israeli army) to neutralise the threat of Hamas's subterranean network of tunnels," the military said in a statement, confirming media reports.

Dubbed "the Gaza metro" by the Israeli army, there were 1,300 tunnels over 500 kilometres (310 miles) in Gaza at the start of the war in October, according to a study from US military academy West Point.

After a drone attack killed three American soldiers in Jordan on Sunday near the Syrian and Iraq borders, Washington immediately accused "radical Iran-backed militant groups operating in Syria and Iraq".

In Iraq, these factions are also affiliated with Hashed al-Shaabi, mainly pro-Iran former paramilitaries now integrated into Iraq's armed forces.

They have major political influence. Their rhetoric highlights hostility to the United States and their role in what Iran calls "the axis of resistance" against Israel, a close ally of the United States.

President Joe Biden said Tuesday he had decided on a response to a deadly drone strike on US forces in Jordan but said he did not seek a wider war in the Middle East.

Facing growing pressure in an election year, Biden said he held Iran responsible for supplying the weapons to the people who carried out the attack that killed three US troops.

Biden, who was hitting the campaign trail in Florida, has previously blamed Iran-backed militias for the first fatal attack on US troops in the region since the Israel-Hamas war broke out in October.

Iranian commentators warned Tuesday of a US military retaliation after Washington pledged a "very consequential" response to troop deaths, but largely agreed full-blown war was not in the offing.

US President Joe Biden blamed "radical Iran-backed militant groups operating in Syria and Iraq" for Sunday's drone strike on a remote Jordan desert base near Syria and Iraq that killed three US forces.

Businesses and shops in several cities in Kurdish-populated western Iran shut down Tuesday in a general strike protesting the hanging a day earlier of four Kurds convicted of collaborating with Israel, activists said.

The four, who had been arrested in July 2022, were hanged at a prison in the city of Karaj outside Tehran in defiance of a campaign by rights groups who said their trial had been grossly unfair.

Their hanging added to concerns over a surge in executions in Iran, which has seen on average two people executed every day so far this month, according to campaigners.

Dozens demonstrated Tuesday outside the United Nations agency for Palestinian refugees in Beirut against several countries' decision to suspend funding for the body after Israel charged some staff participated in Hamas's October 7 attack.

At least 12 key donor countries have said they will halt funding to the United Nations Relief and Works Agency following the accusations, while UNRWA has fired several employees and promised a thorough investigation into the claims.

Palestinians buried dozens of bodies in a mass grave in southern Gaza on Tuesday, after officials said Israel returned remains it had exhumed from the territory.

An AFP photographer saw Gazans moving the bodies in blue plastic shrouds from a truck towards the newly dug mass grave east of Rafah.

Health ministry employees wearing white protective clothing lowered them into the ground, near the tents of people displaced by the Israel-Hamas war.

Israeli undercover agents, some disguised as medical staff, raided a West Bank hospital Tuesday and shot dead three Palestinian militants, in the first such operation in eight years.

An AFP photographer saw a bullet hole on a pillow covered in blood following the raid at Ibn Sina Hospital in the northern city of Jenin, where Palestinians gathered around the bodies of those killed.

The Israeli military said forces entered the hospital -- a major health facility serving Jenin city and its adjacent refugee camp -- to target a "Hamas terrorist cell".