President Donald Trump said on Wednesday Iran had taken too long to negotiate a deal and would now "have to pay the price," while Tehran said it would reassess diplomatic engagement with Washington after overnight tit-for-tat strikes.
Iran launched missile and drone attacks on US bases in Jordan, Kuwait and Bahrain in what it called retaliation for American strikes on Iranian targets around the Strait of Hormuz.
The exchange of fire, which came after Trump said Iran had downed a US Apache helicopter near the strait, marks one of the most significant escalations since Washington and Tehran agreed to a ceasefire in April.
"Iran is all talk and no action," Trump said in a social media post on Wednesday morning. "They've taken too long to negotiate a deal that would have been great for them, now they will have to pay the price!!!"
The US military said it had targeted Iranian air defences, ground control stations and surveillance radar sites in what it described as a "proportional response" to the downing of the helicopter, whose two crew members were rescued.
Iran's Gulf neighbours and Jordan activated air defences to intercept incoming missiles and there were no immediate reports of damage to US bases.
Iran's Foreign Ministry spokesperson said Tehran would reassess diplomatic engagement with Washington after what it called repeated ceasefire violations. "Any diplomatic process requires a minimum stable environment," Esmaeil Baghaei said.
Oil prices jumped by around 2% and stock markets fell after Trump's remarks, which came at the end of a longer message about Iran's military capability, and appeared just minutes after a much longer post criticising a TV host for poor ratings.
Fox News, citing a phone interview, reported that Trump said he may order new strikes on Iran's power plants and bridges because Tehran was taking too long to make a deal.
Still, there were signs diplomatic efforts were continuing. An official with knowledge of the matter told Reuters that Qatari negotiators traveled to Tehran on Wednesday after consultations with the U.S., in an effort to finalise an agreement. There was no immediate comment from Washington or Tehran.
STRIKES AROUND HORMUZ
The US strikes overnight lasted about four hours, with Central Command saying shortly before 9pm ET (0100 GMT Wednesday) that operations had ended. A US official said nearly 20 Iranian targets were hit.
Iran's Islamic Revolutionary Guard Corps (IRGC) said Qeshm Island and the port of Sirik were attacked. Iranian media also reported explosions in Bandar Abbas, another port city, and later near Jask at the entrance to the Strait of Hormuz.
The IRGC said it had responded by attacking U.S. bases in Bahrain, Kuwait and Jordan with drones and missiles, and was ready to deliver a "crushing and decisive" response to any further US action.
It said it had fired long-range missiles at four sites at the US Al Azraq base in Jordan, including F-35 fighter jet hangars and a command-and-control centre.
Reuters