Both sides dig in, as iran war approaches two-week mark

Both sides trade strikes and threats as the Iran war approaches the two-week mark

Escalating Conflict and Global Repercussions

By Parisa Hafezi and Maya Gebeily

DUBAI/BEIRUT, March 13 (Reuters) - The leaders of Iran, Israel and the United States all voiced defiance and vowed to fight on as the Middle East war approached the two-week mark on Friday, killing thousands of people, disrupting the lives of millions of others and shaking financial markets.

Iran's Response and Regional Tensions

New Iranian Supreme Leader Mojtaba Khamenei issued his first comments, read out by a television presenter on Thursday, vowing to keep the Strait of Hormuz shut and calling on neighboring countries to close U.S. bases on their territory or risk Iran targeting them.

"I assure everyone that we will not neglect avenging the blood of your martyrs," said the hardline cleric, who is close to Iran's top military force. It was not clear why he did not appear in person.

Israel's Position and Military Actions

Israeli Prime Minister Benjamin Netanyahu held his first news conference since the U.S. and Israeli airstrikes on Iran started on February 28, taking questions via video-link and issuing a veiled threat to kill Khamenei and defending the military assault.

"I will not detail the actions we are taking. We are creating the optimal conditions for toppling the regime but I won't deny that I can't tell you with all certainty that the people of Iran will topple the regime - a regime is toppled from the inside," Netanyahu said.

"But we can definitely help and we are helping."

Impact on Global Financial Markets

The prospect that one of the most severe disruptions ever to global energy supplies could endure sent oil prices up about 9% to $100 a barrel on Thursday, helping drive down U.S. stocks.

The S&P 500 notched up its biggest three-day percentage drop in a month, and shares in Asia were also under pressure on Friday.

In an effort to stabilize global energy markets, the U.S. on Thursday issued a 30-day license for countries to buy Russian oil and petroleum products currently stranded at sea.

"The temporary increase in oil prices is a short-term and temporary disruption that will result in a massive benefit to our nation and economy in the long-term," Bessent said in the statement, echoing earlier comments from President Donald Trump.

U.S. Political Fallout and Domestic Reactions

U.S. POLITICAL FALLOUT

Trump, who has already declared that the U.S. and Israel won the war, said the United States stood to make significant money from oil prices driven higher because of supply issues tied to the closure of the Strait of Hormuz, through which a fifth of global oil normally passes.

"The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money." Stopping Iran from having nuclear weapons was far more important, he said on social media.

Criticism from Opposition and War Costs

Trump's comments angered opposition Democrats, who accused the Republican president of caring too little about the war's impact on average Americans and demanded more information about civilian casualties, particularly a strike that killed dozens of children at an Iranian girls' school.

Trump's administration has not provided a public assessment of the expected cost or duration of the war, which is unpopular with the American public, or a strategy for Iran after the fighting stops. The president and top aides have also given conflicting reasons for starting to fight.

Casualties and Regional Impact

The death toll has risen to more than 2,000 people, most in Iran. Almost 700 have died in Lebanon, where Israel has targeted central Beirut and ordered residents out of a swathe of the south in an offensive against the Iran-backed Hezbollah group.

Drones have been reported flying into Kuwait, Iraq, the United Arab Emirates, Bahrain and Oman, undermining U.S. and Israeli claims to have knocked out much of Iran's stock of long-range weapons.

In Iraq, U.S. Central Command said it was carrying out rescue efforts after one of its refueling aircraft went down in an incident that involved another aircraft but was not the result of hostile or friendly fire. The Islamic Resistance in Iraq, ​an ​umbrella group of ⁠Iran-backed ​armed factions, claimed responsibility for downing the aircraft.

France's President Emmanuel Macron said one soldier had died and several were wounded during an attack in northern Iraq, hours after an Italian base was also targeted in the area.

Two tankers were set ablaze in the Iraqi port of Basra earlier this week after being hit by suspected Iranian explosive-laden boats and other ships have been struck in the Gulf near the Strait of Hormuz.

Security and Civilian Life Inside Iran

IRAN SECURITY FORCES 'EVERYWHERE'

Inside Iran, residents said security forces were increasing their presence to demonstrate continued control.

"Security forces are everywhere, more than before. People are afraid to come out, but supermarkets are open," teacher Majan, 35, said by phone from Tehran.

Israel and the United States have called on Iranians to rise up and topple their clerical rulers.

Many Iranians want change and some openly celebrated the elder supreme leader's death, after his forces had killed thousands of anti‑government protesters in January. But there has been no sign of organised dissent while the country is under attack.

Economic Strategies and Oil Market Predictions

Iran's message is that its strategy now is to impose prolonged economic shock to force Trump to back off. A spokesperson for Iran's military command said on Wednesday the world should prepare for oil prices of $200 a barrel.

U.S. Energy Secretary Chris Wright said on Thursday he did not expect that to happen, but did not totally rule it out. "I would say unlikely, but we are focused on the military operation and solving a problem," Wright told CNN.

(Reporting by Reuters bureaux; writing by Patricia Zengerle and Lincoln Feast; Editing by Michael Perry)