Rishi Sunak has said the UK is "not seeking a confrontation" with Yemen's Houthi fighters - but it will strike again if their attacks in the Red Sea continue.
Royal Air Force jets took part in a second wave of joint US-UK action against the group on Monday night after further attacks on the vital shipping lane.
The prime minister told MPs: "We are not seeking a confrontation. We urge the Houthis and those who enable them to stop these illegal and unacceptable attacks.
"But, if necessary, the United Kingdom will not hesitate to respond again in self defence.
"We cannot stand by and allow these attacks to go unchallenged. Inaction is also a choice."
Four RAF Typhoons and a pair of Voyager tankers were involved in the latest action.
Several targets were hit at two military sites north of Yemen's capital Sanaa.
Mr Sunak said the strikes were aimed at sites the Houthis use to support their attacks on shipping and "all intended targets were destroyed".
The Houthis, who are backed by Iran, have been targeting shipping they claim is linked to Israel in the context of the conflict with Hamas.
But the UK and allies have warned the attacks are indiscriminate and have included targeting Royal Navy and allied warships.
Middle East latest: Houthis warn UK and US to 'expect a response'
The Red Sea route leading to and from the Suez Canal is one of the world's most important shipping routes and there are concerns the cost of diverting vessels away from it, around southern Africa, will fuel inflation and damage the global economy.
Outlining the UK's wider approach to the situation, Mr Sunak said new sanctions would be announced "in the coming days" and in the long term, the UK must "end the illegal flow of arms to the Houthi militia".
He said this would include "working closely with our allies and partners to disrupt and deter the supply of weapons and components".
"We are going to use the most effective means at our disposal to cut off the Houthis' financial resources where they are used to fund these attacks," he added.
"We are working closely with the United States on this and plan to announce new sanction measures in the coming days."
Mr Sunak also said the UK will continue to deliver aid to Yemen, which is embroiled in a civil war.
Sir Keir Starmer said he backed the "targeted action to reinforce maritime security in the Red Sea".
He told MPs: "The Houthi attacks must stop. They are designed to destabilise us so we must stand united and strong, they bring danger to ordinary civilians who are working hard at sea, so we must protect them, and they aim to disrupt the flow of goods, food and medicines, so we must not let them go unaddressed."
It follows criticism that the Labour leader and the Commons speaker were not briefed on the operation ahead of time.
Sir Keir and Sir Lindsay Hoyle were informed by Downing Street at the time of the strikes rather than before - as was the case in the last round of action on 11 January.
MPs will get the chance to debate the situation on Wednesday but will not be given a vote on the military action.
The prime minister's official spokesman said he was "acting in line with precedence", given military action is a prerogative matter.
However, many MPs want a vote, as they are are concerned about the conflict in the Middle East escalating.
Labour MP Apsana Begum said the strikes in Yemen "escalates risks" in the region, but the prime minister said it was wrong to "draw a link" between the action in Red Sea and the war in Gaza.
As the prime minister spoke, the government published its legal position on the situation.
It said action to "downgrade the Houthi's capabilities and deter further attacks was lawfully taken".
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