Prime Minister Benjamin Netanyahu has reportedly asked the Israel Defence Forces to draw up a list of targets it could hit that the US would not object to.
The considered response to Iran's unprecedented 300-plus missile and drone attack at the weekend could be in the form of a precision strike on a facility in Tehran or a cyber attack, said the Washington Post.
The newspaper quoted an Israeli official, familiar with the discussions, as saying: "Everybody agrees Israel must respond. How to respond, when to respond, is the question."
Israel's Channel 12 news claimed its country's war cabinet had agreed to strike back at Iran "clearly and forcefully" while adding that several options had been discussed that would be "painful" but unlikely to trigger a regional war and will not be blocked by the US.
President Joe Biden has told Mr Netanyahu that Washington would not support an Israeli counter-attack.
Yoav Gallant, the Israeli Defence Minister, told his US counterpart yesterday that Israel has no choice but to respond to the attack, which was thwarted with help from the US and Britain.
Mr Netanyahu is caught between the more hawkish members of his cabinet and the voices of his moderate Allies who are calling for a cautious response.
One senior Israeli figure said the five-member war cabinet, which includes Mr Netanyahu, was toiling to come to a decision.
Nationalist figures in Israel are calling for an immediate military retaliation, despite fears from the international community that this could lead to a "catastrophic escalation" in a wider Middle East conflict.
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