Published by Global Banking & Finance Review®
Posted on March 1, 2026
6 min readLast updated: April 2, 2026
Add as preferred source on GoogleA joint U.S.–Israeli strike on February 28, 2026 killed Iran’s Supreme Leader Ayatollah Ali Khamenei, prompting renewed Israeli strikes targeting Iran’s air defenses and missile systems. The attacks triggered regional retaliation, civilian casualties, and heightened global concern about Middle East
By Rami Ayyub, Alexander Cornwell, Nayera Abdallah and Maha El Dahan
JERUSALEM/TEL AVIV/DUBAI, March 1 (Reuters) - Israel launched a new wave of strikes on Tehran on Sunday and Iran responded with more missile barrages, a day after the killing of Supreme Leader Ali Khamenei pitched the Middle East and the global economy into deepening uncertainty.
U.S. and Israeli strikes - and Iranian retaliation - sent shockwaves worldwide through sectors from shipping to air travel to oil, amid warnings of rising energy costs and disruption to business in the Gulf region.
The Israeli military said it had intercepted projectiles that were launched from Lebanon early Monday morning, in what could be the first sign of Lebanon's Shi'ite Muslim armed group Hezbollah, long one of Tehran's principal allies in the Middle East, entering the conflict.
U.S. President Donald Trump said the attack was intended to ensure Iran could not have a nuclear weapon, to contain its missile program and to eliminate threats to the United States and its allies. The U.S. has hit more than 1,000 Iranian targets since the start of the campaign, U.S. Central Command said.
In a video statement posted to his Truth Social site, Trump vowed military strikes will continue until "all our objectives are achieved." He said the assault had wiped out Iran's military command and destroyed nine Iranian navy ships and a naval building.
Trump said the Iranian military and police should lay down their arms, promising immunity for those who surrender and threatening "certain death" for those who resist. He reiterated calls for the Iranian people to revolt against the government.
"I call upon all Iranian patriots who yearn for freedom to seize this moment, to be brave, be bold, be heroic and take back your country," Trump said in the pre-recorded video. "America is with you."
Earlier in an interview with the Atlantic magazine, Trump said Iran's leadership wanted to talk to him and he had agreed.
In a separate interview with the Daily Mail, he said the military campaign against Iran could continue for the next four weeks.
But the Republican president is yet to lay out his longer-term aims in Iran, which faces a power vacuum that could leave it in chaos, with unforeseeable consequences for the region.
The first U.S. casualties of the campaign, including the deaths of three service personnel, were confirmed on Sunday.
Trump paid tribute to the three killed as "true American patriots" but warned that there will likely be more casualties.
"That's the way it is," he said.
With the vital Strait of Hormuz closed and the Gulf cities of Dubai, Abu Dhabi and Doha under bombardment, the scale of the risk taken by Trump in attacking Iran months before U.S. midterm elections that will decide control of Congress is becoming clearer.
Only around one in four Americans approve of the operation, according to a Reuters/Ipsos poll on Sunday. And if Hormuz - the passage for about 20% of world oil supplies - remains closed for more than a few days, U.S. consumers will start to feel the pressure on prices at the pumps.
The Israeli military said late on Sunday that its air force had established aerial superiority over Tehran, and that a wave of strikes across the capital had targeted intelligence, security, and military command centers.
But the prospect of Hezbollah involvement threatened to widen the conflict further. Hezbollah did not immediately respond to a request for comment, and Reuters was unable to verify the origins of the projectiles the Israeli military said it intercepted. Israel and Lebanon agreed to a U.S.-brokered ceasefire in 2024.
Israel's present focus is to undermine the Iranian government so that it collapses, an Israeli official said on condition of anonymity, adding that Israel "is acting in its own ways" to get Iranians to take to the streets.
Iran's Revolutionary Guards said on Sunday they had hit three U.S. and UK oil tankers in the Gulf and the Strait of Hormuz, and attacked military bases in Kuwait and Bahrain with drones and missiles. Shipping data showed hundreds of vessels including oil and gas tankers dropping anchor in nearby waters with traders expecting sharp jumps in crude oil prices on Monday.
Global air travel was also heavily disrupted as continued air strikes kept closed major Middle Eastern airports, including Dubai - the world's busiest international hub - in one of the biggest aviation interruptions in recent years.
In Iran, facing its biggest existential challenge since the 1980-88 war with Iraq, President Masoud Pezeshkian said a leadership council composed of himself, the judiciary head and a member of the powerful Guardian Council had temporarily assumed the duties of Supreme Leader.
Oman's foreign ministry said Iranian Foreign Minister Abbas Araqchi had indicated Tehran was open to de-escalation. But in a post on X, Araqchi suggested Iran was ready to keep fighting.
"We've had two decades to study defeats of the U.S. military to our immediate east and west," he wrote. "Bombings in our capital have no impact on our ability to conduct war."
It remained unclear what the longer-term prospects were for Iran to rebuild its leadership and replace the 86-year-old Khamenei, who had held power since the death of the founder of the Islamic Republic, Ayatollah Ruhollah Khomeini in 1989.
Russian President Vladimir Putin denounced Khamenei's death as a cynical murder and China's Foreign Minister Wang Yi described it as "blatant killing".
As Iran fired renewed missile barrages across the region, air raid sirens sounded across Israel late on Sunday, warning of the latest incoming attack, including in Tel Aviv, where projectiles were seen streaking across th
The strikes were part of efforts to end Iran's threat and prevent nuclear weapon development, resulting in the killing of Iran's supreme leader.
Iran launched hundreds of missiles and drones at US troops, Israel, and allied cities in retaliation for the strikes.
Iran closed the Strait of Hormuz, through which a fifth of global oil passes, raising expectations of a surge in oil prices.
Iran's UN ambassador reported hundreds of civilian casualties from the US and Israeli strikes.
UN Secretary-General Antonio Guterres called for an immediate ceasefire, regretting the missed opportunity for diplomacy.
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