Iran and Israel said today they had suspended mutual attacks after US President Donald Trump called for an immediate "cease fire", although Tehran said it would continue strikes if Israel continued to attack Hezbollah in Lebanon.
The wave of attacks over the past 24 hours represented the most direct confrontation between Iran and Israel since an April ceasefire, threatening to undermine Washington's efforts to reach a deal with Tehran to end their more than three-month-old war.
Oil prices, which rose as much as 5 percent after the series of attacks, fell later in the day after Iran's military said its first wave of strikes on Israel had ended. The dollar retreated from its highest level in nearly two months.
A source familiar with the matter told Reuters that Israel had also decided to suspend attacks on Iran.
Israel hit Iranian targets after Tehran fired rockets into Israeli territory late Sunday. Tehran said its strikes were in retaliation for Israeli attacks on Iranian-backed Hezbollah strongholds on the outskirts of Beirut.
Israel has struck a petrochemical facility in southwestern Iran that it said was being used to produce ballistic missiles. Iran's Revolutionary Guard Corps (IRGC) said it retaliated by striking a similar Israeli facility in the city of Haifa.
Iran's military headquarters said it had "dealt a painful response" to Israel for its attacks on Lebanon, including strikes carried out on Sunday on the outskirts of Beirut.
"Accordingly, the operations of the armed forces are hereby declared suspended; however, it is emphasized that if the aggressions and hostile actions continue - including those in southern Lebanon - much more severe and destructive actions than before will ensue."
The exchange of blows complicated Trump's efforts to end the war, which the United States and Israel launched on February 28, and showed how easily the conflict could escalate into a wider regional confrontation. A ceasefire, announced on April 8, halted the full-scale war, but incidents in the Gulf have continued.
In one of several social media posts, Trump said both Israel and Iran want an “immediate CEASEFIRE! Final ‘peace’ talks are moving forward, unless thwarted by ignorance or stupidity.” He added that the US blockade of Iranian ports would remain in place until a final agreement is reached.
An Israeli official told Reuters that Trump spoke with Prime Minister Benjamin Netanyahu today.
Earlier, an Israeli military official said Israel was prepared to continue operations "for as long as necessary" and confirmed strikes on recently refurbished Iranian air defense systems, in addition to the petrochemical target.
Iranian officials have taken an equally defiant tone. A military source, quoted by the semi-official Tasnim news agency, said Tehran was prepared for a prolonged conflict and could renew attacks on US interests in the region.
Iranian Foreign Ministry spokesman Esmail Bagai said Tehran was exchanging messages with Washington in an atmosphere of “extreme distrust.” He added that Israeli actions in Lebanon, whether carried out with the knowledge and consent of the US or not, were aimed at sabotaging diplomacy.
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