By Parisa Hafezi and James Mackenzie

DUBAI/JERUSALEM (Reuters) -Explosions echoed over an Iranian city on Friday in what sources said was an Israeli attack, but Tehran played down the incident and indicated it had no plans for retaliation – a response that appeared gauged towards averting region-wide war.

Iran’s foreign minister said the drones, which the sources said Israel launched against the city of Isfahan, were “mini-drones” and that they had caused no damage or casualties.

The limited scale of the attack and Iran’s muted response appeared to signal a successful effort by diplomats who have been working to avert all-out war since an Iranian drone and missile attack on Israel on Saturday.

Iranian media and officials described a small number of explosions, which they said resulted from air defences hitting three drones over Isfahan in central Iran. They referred to the incident as an attack by “infiltrators”, rather than by Israel, obviating the need for retaliation.

A senior Iranian official told Reuters there were no plans to respond against Israel for the incident.

“The foreign source of the incident has not been confirmed. We have not received any external attack, and the discussion leans more towards infiltration than attack,” the official said.

Iranian Foreign Minister Hossein Amirabdollahian was also cautious in comments to envoys of Muslim countries in New York.

“The Zionist regime’s (Israel’s) media supporters, in a desperate effort, tried to make victory out of their defeat, while the downed mini-drones have not caused any damage or casualties,” Amirabdollahian was quoted as saying by Iranian media.

Israel said nothing about the incident and its ally Washington refused to be drawn.

Asked about it repeatedly at a press conference in Italy, U.S. Secretary of State Antony Blinken said he would not comment apart from saying that the United States was committed to Israel’s security but not involved in any offensive operations.

“Israel tried to calibrate between the need to respond and a desire not to enter into a cycle of action and counter reaction that would just escalate endlessly,” said Itamar Rabinovich, a former Israeli ambassador to Washington.

Violence between Israel and Iranian proxies across the Middle East has intensified throughout six months of bloodshed in Gaza, raising fears the longstanding foes’ shadow war could spiral into a direct conflict.

Israel had said it would retaliate after Saturday’s strikes, the first ever direct attack on Israel by Iran, which caused no deaths after Israel and its allies shot down hundreds of missiles and drones.

Tehran launched those attacks in response to a presumed Israeli airstrike on April 1 that destroyed a building in Iran’s embassy compound in Damascus and killed several Iranian officers including a top general.

CALLS FOR CALM

Allies including the U.S. had pressed all week to ensure any further retaliation would be calibrated not to provoke more escalation, and Western countries tightened sanctions on Iran to mollify Israel.

There was no word from Israel on Friday as to whether further action might be planned. Apart from direct strikes on Iranian territory, it has other ways of attacking, including cyber attacks and strikes on Iranian proxies elsewhere.

In a sign of pressure within Israel’s hard-right government for a stronger response, Itamar Ben Gvir, the far-right national security minister posted a single word on X after Friday’s strikes: “Feeble”.

At the end of a meeting in Italy, foreign ministers of the Group of Seven industrialised democracies urged “all parties to work to prevent further escalation.”

They also called for a ceasefire in the Gaza Strip, the release of hostages held there by Hamas, an influx of aid for civilians in Gaza and for Israel to hold off from attacking Rafah, the last refuge for more than a million Gazans.

Beijing, Moscow and Arab states also called for restraint in the region.

In financial markets, oil prices initially surged but later slipped back, a move market analysts said pointed to a belief that an escalation of hostilities in the region might be avoided.

By morning, Iran had reopened airports and airspace that were shut during the strikes. But travel disruption is set to continue in the region, with some flights rerouted by international airlines and others suspended.

DRONES ‘DESTROYED IN THE SKY’

In Iran, news reports on Friday’s incident made no mention of Israel, and state television carried analysts and pundits who appeared dismissive about the scale.

Shortly after midnight, “three drones were observed in the sky over Isfahan. The air defence system became active and destroyed these drones in the sky,” Iranian state TV said.

Israeli media avoided quoting Israeli officials directly, instead referring to foreign media reports that cited Israeli sources as confirming Israel was behind the attacks.

Some Israelis suggested the aim was to demonstrate the capability to attack without causing harm. One newspaper likened it to a biblical story of the future King David snipping a piece from the robe of a foe when given a chance to kill him.

Iran had warned Israel before Friday’s strike that Tehran would deliver a severe response to any attack on its territory, and had told the U.N. Security Council that Israel must be compelled to stop further “military adventurism against our interests”.

Israel’s assault on Gaza began after Hamas Islamists attacked Israel on Oct. 7, killing 1,200, according to Israeli tallies. Israel’s military offensive has killed 34,000 Palestinians in Gaza, according to the Gazan health ministry.

Iran-backed groups have declared support for Palestinians, carrying out attacks from Lebanon, Yemen and Iraq, raising fears the Gaza conflict was growing into a wider regional war.