Israel-Iran attacks span fourth day with no deal in sight

Hostilities between Israel and Iran entered a fourth day on Monday with no sign of easing, stoking fears of a wider war in the oil-rich region.

Iran fired several waves of drones and missiles over the last 24 hours, while Israel continued hitting the Islamic Republic’s capital, Tehran, killing one more senior military official.

Since Friday, 224 people have been killed in Iran, according to the government, which said most of the casualties were civilians. Iranian attacks killed 23 people in Israel, according to an official in Prime Minister Benjamin Netanyahu’s office, and injured more than 400.

The U.S. consulate in central Tel Aviv sustained minor damage after an Iranian missile landed nearby, the ambassador to Israel, Mike Huckabee, said Monday. Many cars were crushed in the area of the city where the strike happened. Bulldozers were collecting debris.

Tensions between the arch-enemies erupted into full-blown conflict on Friday, when Israel attacked Iranian military and nuclear sites, and killed several top generals and atomic scientists. Since then, it has achieved air superiority over large parts of Iran, including Tehran, and degraded the ability of the Islamic Republic to defend against its strikes.

Iran has countered by firing drones and ballistic missiles at the Jewish state. Israel believes Iran still has thousands of missiles left, according to National Security Adviser Tzachi Hanegbi, who in an interview with the Army Radio.

For Iran, the showdown poses an existential dilemma. It can’t risk appearing weak, yet its options are shrinking. Its proxy forces across the region, which regularly rallied to its support in the past, have been debilitated by Israeli action over the past 20 months. Hezbollah, the Lebanese militia the U.S. and others designate as a terrorist group, is noticeably absent from the conflict and hasn’t signaled it will start attacking Israel.

After having urged Iran to reach a nuclear deal at the onset of the Israeli attacks, U.S. President Donald Trump on Sunday said it and Israel “should make a deal, and will make a deal.”

“We will have PEACE, soon, between Israel and Iran!” he said on Truth Social. “Many calls and meetings now taking place.”

Yet, shortly after, he also said “but sometimes they have to fight it out.”

There was little to suggest either side was prepared to deescalate.

“We are in an existential campaign,” Netanyahu said as he visited the site of a missile strike on the coastal city of Bat Yam on Sunday. “Iran will pay a very heavy price for deliberately murdering our citizens, women and children.”

Defense Minister Israel Katz said the “regime in Tehran” was now a target.

However, Hanegbi, the national security adviser, said there are no plans to topple the Iranian government. “But it can, of course, be an outcome of the campaign,” he told Israel’s Kan broadcaster.

Israel’s military said it hit military sites in various parts of Iran and killed the intelligence chief and other key officials of the Islamic Revolutionary Guard Corps.

The tit-for-tat weighed on financial markets, with equities in Saudi Arabia, Egypt and Qatar dropping on Sunday. The Egyptian pound weakened about 1.8% to beyond 50 per dollar in local trades. Israeli stocks rose, led by defense company Elbit Systems Ltd.

Brent crude’s gains faded after futures climbed as much as 5.5% in Asia trading on Monday. West Texas Intermediate was near $74. Stocks in Europe rose tentatively.

Energy fears

Iran reported an explosion at one of its natural gas plants linked to the giant South Pars field on Saturday. While the country exports little gas and Israel appears not to have targeted its oil fields or crude-shipment facilities, the move risks pushing up global energy prices — which soared on Friday — even more.

The United Nations’ nuclear watchdog the International Atomic Energy Agency said multiple strikes on Iran’s uranium-conversion facility at Isfahan, south of Tehran, resulted in serious damage.

Iran’s deputy foreign minister, Kazem Gharibabadi, told state television that “we will no longer cooperate with the agency as we did before.”

According to Iran’s Fars news service, a key parliamentary committee said Tehran should no longer adhere to the nuclear Non-Proliferation Treaty, the bedrock arms-control agreement that compels signatories to accept inspections.

For now, it’s unclear if the government will take such steps.

Worst conflict

Arch-enemies Israel and Iran have long fought a shadow war. The Jewish state’s been accused of cyberattacks and assassinating Iranian scientists, while Tehran’s funded anti-Israel militias in the Middle East.

Those tensions soared after Hamas, a Palestinian group backed by Iran, attacked Israel on Oct. 7, 2023. That led to Israel and Iran firing missiles and drones on each other twice last year.

Still, this is their most serious conflict yet. Since the fighting began, Israel struck Iran’s nuclear and military sites using jets and drones, and killed several top commanders and atomic scientists.

Israel said it was aiming to end Iran’s ability to build a nuclear bomb, which it sees as an existential threat. Tehran maintains its atomic program has purely civilian purposes.

Iran canceled its next round of nuclear talks with the U.S. scheduled for Oman on Sunday. The same day, Trump reiterated that the U.S. wasn’t involved in Israel’s attacks and said he could still get a nuclear deal with Iran.

He’s set to meet other leaders of the Group of Seven major economies in Canada and the conflict will be at the forefront of their talks. Israel is calling on Washington and European nations to help it attack Iran, arguing that such help is needed to stop Tehran from developing a nuclear weapon.

While the U.S. has helped defend Israel by intercepting missiles and drones, Trump has not yet indicated if the US will join in the strikes on Iran.

For all that Israel’s already damaged Iranian atomic sites and says it will continue to strike them. Several Western analysts say it needs U.S. help to destroy some key facilities located deep underground.

It’s unclear if Tehran is entertaining last-resort options such as attacking tankers in the Strait of Hormuz, through which Middle Eastern states ship about a fifth of the world’s oil.

That type of action may draw the U.S., the world’s most powerful military, into the conflict, something Tehran has probably calculated it can’t afford, according to Bloomberg Economics analysts. That’s partly because the Iranian economy is already weak, with inflation at almost 40%, and public frustration with the government is high.

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—With assistance from Dan Williams, Jonathan Tirone, Richard Henderson, Josh Wingrove and Jon Herskovitz.