President Joe Biden said US forces helped Israel shoot down nearly all the drones and missiles fired by Iran Saturday, but appeared to guide the key US ally away from retaliating against Tehran by saying Israel had now shown its strength.

Biden added that he was convening fellow G7 leaders on Sunday to coordinate a diplomatic response against Tehran, in another sign that he is trying to avoid any further military escalation that could ignite a wider Middle East conflict.

After three days off, people in Tehran returned to work as normal on Saturday, but with a lingering cloud of concern that soaring tensions between Iran and its arch foe Israel could tip over into war.

"I don't know who is at fault and who is not, but it is better to reach a compromise so that the war does not begin, and innocent people don't die," said Maryam, a 43-year-old private sector worker.

Like most Iranians, Maryam has been following the news about a stand-off between Iran and Israel since a strike hit Iran's consulate in Damascus on April 1.

Prime Minister Benjamin Netanyahu on Saturday condemned the "heinous murder" of an Israeli teenager in the occupied West Bank as attacks on Palestinian villages intensified following news of his death.

After Benjamin Achimeir, 14, was reported missing near Ramallah on Friday, hundreds of Jewish settlers backed by Israeli forces raided nearby Palestinian villages, torching cars and homes, and left at least one villager dead and dozens wounded.

World powers urged restraint on Sunday for fear that Iran's unprecedented missile and drone strikes on Israel could spark a wider war in the Middle East, as the United Nations heard a call for new sanctions against Tehran.

Iran launched the attack, its first ever to directly target Israeli territory, in retaliation for a deadly air strike widely blamed on Israel that destroyed Tehran's consular building in Syria's capital early this month.

The search for a missing Israeli teenager resumed Saturday in the occupied West Bank, where settler attacks on Palestinian villages have left at least one dead and dozens injured, sources on both sides said.

The Israeli army said it was still looking for Benjamin Achimeir, 14, who went missing early on Friday from Malachi Hashalom, an outpost near the city of Ramallah.

With tensions already high due to the Israel-Hamas war in the other Palestinian territory of Gaza, Israeli security forces and hundreds of volunteers formed a huge search party to look for the teen.

Six months after Hamas's October 7 attack, dozens of hostages are still languishing in captivity -- a fact that for many Israelis has ruptured a foundational contract between them and their government.

"The Jewish people need protection, especially with who we live next to," said Einat Avni Levi, whose family home is within sight of Gaza.

Five of her neighbours in the Nirim kibbutz community were killed and five more taken hostage by Hamas militants on October 7.

The Gaza war is speeding up Israel's "annexation" of the Palestinian economy, say analysts, who argue it has been hobbled for decades by agreements that followed the Oslo peace accords.

While the Israel-Hamas war raging since October 7 has devastated swathes of Gaza, it has also hit the public finances and wider economy of the Israeli-occupied West Bank.

Israel is tightening the noose on the Palestinian Authority, which rules parts of the West Bank, by withholding tax revenues it collects on its behalf, economist Adel Samara told AFP.

Salman Rushdie, targeted for assassination since 1989 over his writing, had long wondered who would kill him. When he was stabbed almost fatally, his first thought was, "So it's you."

The novelist has recounted his thoughts on his 2022 near death in a book, "Knife: Meditations After an Attempted Murder," which is set for publication on Tuesday.

In an excerpt from the book which he read for the CBS News show "60 Minutes," Rushdie described "the last thing my right eye would ever see" -- a man in black clothes "coming in hard and low" like a "squat missile."

An Argentine court has blamed Iran for two deadly attacks on Israeli targets in Buenos Aires three decades ago, declaring it a "terrorist state" in a ruling welcomed Friday by Israeli and Jewish organizations.

The ruling on Thursday, cited by press reports, said Iran had ordered a 1992 attack on the Israeli embassy and another in 1994 on the Argentine Israelite Mutual Association (AMIA) Jewish community center.

Israel launched a massive manhunt in the occupied West Bank Friday after an Israeli teenager went missing, with the search party clashing with Palestinian villagers, sources from both sides said.

Benjamin Achimeir, 14, went missing at around 6:30 am (0330 GMT) from Malachi Hashalom, an outpost near Ramallah, the Israeli army and a family member said.

The Israeli army said that air, ground, police and other forces were involved in the search, "blocking roads and scanning the area".