Iran said on Sunday it would strike the energy and water systems of its Gulf neighbors in retaliation if US President Donald Trump follows through with a threat to hit Iran's electricity grid in 48 hours, escalating the three-week-old war.
The prospect of tit-for-tat strikes on civilian infrastructure could deepen the regional crisis and rattle global markets when they reopen on Monday morning, Reuters reported.
Air raid sirens sounded across Israel from the early hours of Sunday, warning of incoming missiles from Iran, after scores of people were hurt overnight in two separate attacks in the southern Israeli towns of Arad and Dimona.
The Israeli military said hours later that it was striking Tehran in response.
Trump threatened overnight to "obliterate" Iran's power plants if Tehran did not fully reopen the Strait of Hormuz within 48 hours, barely a day after he talked about "winding down" the war. He made the new threat as US Marines and heavy landing craft are heading to the region.
Iran's Parliament Speaker Mohammad Baqer Qalibaf wrote on X that critical infrastructure and energy facilities in the Middle East could be "irreversibly destroyed" should Iranian power plants be attacked.
Iran's powerful Revolutionary Guards said it would also mean the shipping lane where a fifth of global oil and liquefied natural gas normally transits along Iran's southern coast would remain shut.
"The Strait of Hormuz will be completely closed and will not be opened until our destroyed power plants are rebuilt," the Guards said in a statement.
"President Trump's threat has now placed a 48-hour ticking time bomb of elevated uncertainty over markets," said IG market analyst Tony Sycamore, who expects stock markets to fall when they reopen on Monday.
Oil prices jumped on Friday, ending the day at their highest in nearly four years.
Markets already under severe strain from blockaded shipping were further rattled last week when Israel attacked a major gas field in Iran, and Tehran responded with strikes on neighbors Saudi Arabia, Qatar and Kuwait, raising the prospect of damage hindering energy output even if tankers resume sailing.
Iranian attacks have effectively closed the Strait of Hormuz, causing the worst oil crisis since the 1970s. Its near-closure sent European gas prices surging as much as 35% last week.
"If Iran doesn't FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz, within 48 HOURS from this exact point in time, the United States of America will hit and obliterate their various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!" Trump posted on social media around 7:45 p.m. EDT (2345 GMT) on Saturday.
Iranian media quoted the country's representative to the International Maritime Organisation as saying the strait remains open to all shipping except vessels linked to "Iran's enemies".
Ali Mousavi said passage through the waterway was possible by coordinating security and safety arrangements with Tehran.
Ship-tracking data shows some vessels, such as Indian-flagged ships and a Pakistani oil tanker, have negotiated safe passage through the strait. But the vast majority of ships have remained holed up inside.
Iran's Khatam al-Anbiya military command headquarters said on Sunday if the US hit Iran's fuel and energy infrastructure, Iran would attack all US energy, information technology and desalination infrastructure in the region.
Striking major Iranian power plants could trigger blackouts, crippling everything from pumps and refineries to export terminals and military command centres.
