UPDATE 2-EU's von der Leyen says risk of regional spillover from Israel-Hamas war is 'real'

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By Andrea Shalal and Eric Beech

WASHINGTON, Oct 19 (Reuters) - European Commission President Ursula von der Leyen on Thursday said the risk of regional spillover from the Israel-Hamas war is "real" and underscored the need to tighten sanctions on Iran, which she said was supplying the militant group.

Speaking at the Hudson Institute in Washington, von der Leyen also said dialogue between Israel and its neighbors must continue.

"We have seen the Arab streets fill with rage all across the region. So the risk of a regional spillover is real," she said.

Israel is waging war against Hamas in the Palestinian enclave of Gaza after the militant group killed more than 1,400 people in a surprise attack on Israel on Oct. 7.

The toll from Israeli strikes on Gaza has risen to more than 3,500 dead and more than 12,000 wounded, according to Palestinian health officials.

Israel is also clashing with Hezbollah at the Lebanon border.

"Iran, Hamas' patron, only wants to fuel the fire of chaos. Russia, Iran's war-time customer, is watching carefully. Russia and Hamas are alike," the EU leader said.

Von der Leyen decried the "evil role that Iran plays in the background," adding that it was "without question" that Iran supplied 93% of the weapons being used by Hamas.

She said was vital to continue sanctioning Iran, and widen sanctions and a crackdown on sanctions evasion.

"That we have to step up is without question," she said.

Von der Leyen said Western sanctions over the war in Ukraine were crippling Russia's economy, but Brussels and its allies would continue to focus on sanctions evasion. (Reporting by Andrea Shalal; writing by Eric Beech; editing by Paul Grant and Alistair Bell)