Israel, Iran Trade Blows for Third Day With No Sign of Letup
(Bloomberg) -- Israel and Iran continued intense bombardments on one another’s territories for the third day, with no sign of a reprieve and growing concerns over a wider conflict in one of the world’s key oil-producing regions.
Israel on Sunday reported a new wave of missile attacks from Iran, just hours after intercepting an earlier barrage and carrying out simultaneous strikes on Tehran. Since midnight, four people were killed and 207 wounded in the strikes, emergency services said.
The tit-for-tat followed reports of explosions across Iran, including one at a natural gas plant linked to the giant South Pars field.
The enmity between the two countries once again turned into open conflict on Friday, when Israel preemptively struck Iran’s nuclear and military sites. Assaults since then have shown Israel maintains dominance in the air and highlight the limits of Tehran’s ability to mount a credible response.
For Iran, that’s an existential dilemma: it can’t afford to appear weak, but its options are narrowing and proxy groups it backs have limited options to support the Islamic Republic, with Israel having diminished their ability to attack.
On Sunday, Iran fired ballistic missiles in retaliation, with some targeting Israel’s infrastructure and energy facilities around Haifa, according to state media. Israel advised residents to remain in bomb shelters for a brief period, while its forces tried to intercept the projectiles.
Prime Minister Benjamin Netanyahu said his military would “strike at every site and every target of the Ayatollah regime,” while Iran’s Supreme Leader Ayatollah Ali Khamenei said a day earlier that Israel won’t be able to “escape unscathed” after its attacks on the Islamic Republic.
The ongoing barrages and intense conflict have sent shockwaves through financial markets, with oil surging 7% on Friday and investors rushing to buy haven assets such as gold. The MSCI World Index of developed-country stocks dropped the most since April.
Iran canceled its next round of nuclear talks with the US scheduled for Oman on Sunday.
US President Donald Trump, who is seeking an accord that would curb Iran’s nuclear activities in return for sanctions relief, said on social media that “this war in Israel-Iran should end.”
Trump and Russian President Vladimir Putin discussed the escalating crisis in a roughly hour-long phone call on Saturday.
During the call, the Russian leader condemned Israel’s military operation against Iran and voiced serious concern over a potential escalation that could have “unpredictable consequences for the entire region,” Tass reported, citing Kremlin aide Yuri Ushakov.
Trump told Putin he doesn’t rule out a return by the US to negotiations on Iran’s nuclear program, Ushakov said.
Iran’s neighbors, wary that the conflict could spiral out of control and widen, stepped up diplomatic efforts to stop the fighting. Saudi Arabia’s Crown Prince Mohammed bin Salman spoke to Iran’s President Masoud Pezeshkian, urging restraint.
Turkish President Recep Tayyip Erdogan said in a call with the Iranian leader that diplomacy was the only solution to the nuclear standoff.
The United Nations’ atomic watchdog said Israeli strikes on Iran’s uranium-conversion facility an Isfahan resulted in serious damage. Disabling the facility would seriously crimp Iran’s ability to enrich uranium in large volumes.
Still, most of Iran’s nuclear facilities are spread out across many locations, with some hidden deep under rock and reinforced concrete. Israel’s ability to damage them, without help from US weapons and planes, is limited.
Trump, who has warned Iran to agree on a nuclear deal “before it is too late,” has not yet indicated if the US would join Israel in striking Iran.
According to a report in Axios citing unnamed sources, Israeli officials have urged the Trump administration to join the fight against Tehran.
Further escalation — particularly any targeting of American military or diplomatic facilities in the region — may help Iran’s rulers rally political support domestically but would dramatically intensify the conflict.
It’s unclear if Tehran is entertaining last-resort options — such as attacking tankers in the Strait of Hormuz, through which Middle East producers ship about a fifth of the world’s daily output. That type of action may draw the US, the world’s most powerful military, into the conflict, a risk Tehran has calculated that it can’t afford, according to Bloomberg Economics analysts.
Several top Iranian generals were killed and key military infrastructure was badly damaged in Israel’s opening strikes on Friday, which left almost 80 people dead, according to an official tally.
On Saturday, four sites in the East Azerbaijan province were struck, as was Tehran’s Mehrabad International Airport — where the air force has a base and the national carrier is headquartered, according to Iranian media.
Israel also attacked defense ministry buildings, including its headquarters, several residential buildings in the capital’s suburbs and an oil depot to the west of the city, according to the reports.
Iran’s network of allied militia in the Middle East has also been severely weakened by Israel’s conflicts with Hamas in Gaza and Lebanon-based Hezbollah. Another key ally, Syria’s ex-president Bashar al-Assad, was overthrown late last year when his administration fell to a rebel uprising.
Iran’s military command structure has been decimated by the Israeli actions. Islamic Revolutionary Guard Corps leader Hossein Salami and military chief of staff Mohammad Bagheri were both killed in strikes, while at least two other senior IRGC members and some atomic scientists also died.
Meanwhile, leaders of the Group of Seven major economies are gathering in Canada and attention will be on Trump’s reaction to the conflict. Going into the summit, there was a common desire to keep fraught geopolitical issues off the table, but that will be difficult given the knock-on effects of a spike in oil prices on inflation.
(Updates with number of deaths, casualties in second paragraph.)
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