Four days into the war, US President Donald Trump told reporters on Tuesday that the US military had struck numerous Iranian naval and air targets, saying that "just about everything has been knocked out".
In his most extensive public comments yet, he also sought to justify the assault on Iran, saying he had ordered his forces into action because he had "a feeling" Iran would attack after negotiations over its nuclear program stalled.
In response to the fierce assault, Iranian drones struck the US embassy in Saudi Arabia after previously hitting the mission in Kuwait. Washington shut both embassies, as well as its one in Lebanon, and ordered non-emergency government personnel and their families to leave much of the Middle East.
A source familiar with Israel's war plan told Reuters that the campaign had been planned to last two weeks and was going through its target list faster than expected, with early success in killing its leaders -- including Supreme Leader Ayatollah Ali Khamenei in the opening salvoes on Saturday.
When asked who he would like in charge in Iran following the death of Khamenei, Trump gave a blunt assessment: "Most of the people we had in mind are dead."
Iran's capital Tehran was repeatedly shaken by violent explosions through the day, with Israel striking the headquarters of the state broadcaster IRIB as well as an area around the city's Mehrabad airport.
The building housing Iran's Assembly of Experts, tasked with choosing a leader to replace Khamenei, was also flattened by an air attack in the city of Qom south of Tehran, Iranian news agencies said.
It was not immediately clear if anyone died in the raid, but Trump said senior Iranians had perished on Tuesday, without giving details. "I guess there was another hit today on the new leadership, and it looks like that was pretty substantial also," he said.
As Iranians have fled cities, the capital has become a ghost town.
"How long will this continue? Where are the shelters? Where is the government?" Bijan, 32, a bank employee, told Reuters by telephone from Tehran.
"Every night my wife and I hide in the basement. The whole city is empty. There is smoke and blood everywhere."
Firuzeh Seraj said she was afraid to take her 10-year-old daughter for dialysis treatment after a hospital in the capital was struck.
"World, do you see? They are killing us. Hear our voice," she said through tears from Tehran.
Global stock markets slid as the disruption of Middle East energy supplies threatened to reignite post-pandemic inflation.
The price of crude oil gained nearly eight per cent on Tuesday to above $US83 ($A118) per barrel, the highest since July 2024, taking gains since Friday to more than 15 per cent, and the European wholesale price for natural gas was up a punishing 40 per cent.
Trump said on Tuesday that as soon as the war ended, "those prices are going to drop I believe lower than even before".
Wall Street indexes were down nearly two per cent by, following European stocks' more than three per cent loss after MSCI's Asia Pacific index closed down 3.5 per cent.
Iran has called the war an unprovoked attack.
"We have told the enemy that if you try to harm our main centres, we will hit all economic centres in the region," Ebrahim Jabari, a senior adviser to the Revolutionary Guards commander-in-chief, said in remarks carried by Iranian media.
Iran has fired missiles and drones at neighbouring Arab states that host US bases, and strangled shipping through the Strait of Hormuz, where a fifth of the world's supplies of oil and liquefied natural gas travel past its coast.
Qatar, one of the world's main exporters of LNG, has halted production, while tankers have dropped anchor in the Gulf rather than brave the strait.
The cost of hiring a tanker to ship oil from the Middle East to Asia has nearly quadrupled since last week to an all-time high well over $US400,000 ($A569,759) a day.
The war has also spread to Lebanon, where Iran's Hezbollah allies fired on Israel, which responded with air strikes and reinforcements of ground positions in the south. Thick black smoke blanketed Beirut as the sound of explosions rumbled in the air. Authorities said dozens were killed there.
Iran said its death toll from the attacks had reached 787, citing the Red Crescent.
