Israeli strikes killed the intelligence chief of Iran's Revolutionary Guards, as the Islamic republic on Monday defied threats from US President Donald Trump to devastate civilian infrastructure if it does not reopen the Strait of Hormuz.
The warring sides kept up their barrage of strikes, with Iranian missiles and drones targeting Israel, Kuwait and the United Arab Emirates, and Israeli strikes hitting Iran and swathes of Lebanon where it is battling Tehran-backed Hezbollah.
Iran said that "much more devastating" attacks would come if Trump followed through on his vow to hit civilian targets.
The American leader had in social media posts Sunday threatened to destroy Iran's civilian infrastructure if Tehran does not bow to his demand to reopen the Gulf to shipping by "Tuesday 8:00 PM" (0000 GMT Wednesday).
Iran has all but blocked the Strait of Hormuz, a vital energy chokepoint, sending oil and gas prices soaring and pushing countries around the world to enact measures to contain the fallout.
In a stark, expletive-laden post on Sunday, Trump demanded: "Open the Fuckin' Strait, you crazy bastards, or you'll be living in Hell."
Tehran's Deputy Foreign Minister Kazem Gharibabadi responded to Trump's by saying that the US leader had "publicly threatened to commit war crimes" by menacing bridges and power plants.
Iran's Revolutionary Guards said the strait "will never return to its former status, especially for the US and Israel."
The Guards posted on Telegram Monday that their intelligence chief Majid Khademi had been killed "at dawn" in US-Israeli strikes.
Israel's Defence Minister Israel Katz said his country's military had been behind the strike, saying that it had been a response to Iran's attacks on civilian areas in Israel.
Katz called Khademi "one of the direct perpetrators of these war crimes and one of the top three officials in the organisation", and said of Iran's leaders: "We will continue to hunt them one by one."
- A deal? -
Prices for US oil benchmark West Texas Intermediate were down 2.2 percent at $109.16 around 0915 GMT Monday, as reports surfaced of a potential halt to the fighting.
Citing US, Israeli and regional sources, US news website Axios said a deal mediated by Pakistan, Egypt and Turkey for a 45-day ceasefire to allow for negotiations on a more permanent peace was under discussion.
Egypt's Foreign Minister Badr Abdelatty had on Sunday confirmed he was engaging in talks with governments across the region, as well as US envoy Steve Witkoff and Iran's Foreign Minister Abbas Aragchi.
"Views and proposals were exchanged on ways to deescalate the military situation in the region given the delicate juncture it is currently facing," a statement from the ministry said.
Trump told Fox News Iran was "close" to making a deal, but Iran has repeatedly denied it was engaged in any negotiations with the United States and Israel.
- 'Region going to burn' -
The war, which erupted on February 28 with US-Israeli strikes on Iran that killed supreme leader Ayatollah Ali Khamenei, has engulfed the Middle East and strained the global economy.
A worldwide oil squeeze was making itself felt, with Indonesia on Monday announcing an increase in an aviation fuel surcharge from 10 to 38 percent.
In an attack on Trump, Iran's parliament speaker, Mohammad Bagher Ghalibaf, posted on social media that "our whole region is going to burn because you insist on following (Israel Prime Minister Benjamin) Netanyahu's commands."
In Tehran, many residents seemed outwardly indifferent to Trump's invective, with young Iranians exercising, flying kites and holding picnics in a large park in the city's west Sunday.
Trump is due to give details on the rescue of an airman whose fighter jet was shot down by Iran in a press conference later Monday.
Gulf nations reported a wave of fresh strikes from Sunday to Monday, with Kuwait saying six were hurt in an attack on a residential area.
The United Arab Emirates also said on Monday that its air defences were responding to a missile and drone attack, and that one person was injured in an industrial area of Abu Dhabi.
The Israeli military and medics said a missile fired from Iran hit a residential building in the northern city of Haifa.
Firefighters said two people had been killed and two more were missing under the rubble.
- 'Choose peace' -
In Iran, local media reported several attacks on residential areas over Tehran Monday, while the state broadcaster said that gas outages hit parts of the capital after a strike on a university.
Israel's army said early Monday it had completed a wave of strikes against targets in Tehran.
On another front, Lebanon has increasingly been dragged into the conflict since Iran-backed Hezbollah targeted Israel on March 2.
Israel has struck back and invaded southern Lebanon, with the army chief Lieutenant General Eyal Zamir visiting troops there Sunday and pledging to intensify strikes.
AFP journalists witnessed a new strike on Beirut's southern suburbs Monday after Israeli forces warned residents to evacuate.
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THE NEW YORK TIMES COMPANY
