• Israeli airstrikes hit key Iranian nuclear sites and military leadership, marking a dramatic escalation.
  • Iran retaliates with drone attacks on Israeli territory as global powers urge de-escalation.
  • Markets brace for potential oil supply disruptions and heightened regional instability.

Israel intensifies strikes on Iranian targets

Israeli forces launched a major military operation against Iran overnight, striking the Natanz Enrichment Complex and multiple locations in Tehran. Prime Minister Benjamin Netanyahu declared the campaign would continue "for as many days as it takes to remove the [Iranian] threat," according to a statement from his office. The attacks reportedly killed high-ranking Iranian military figures, including Major General Mohammad Bagheri and Major General Hossein Salami, along with several nuclear scientists.

Iran responded by launching over 100 drones toward Israeli territory, though initial reports indicate most were intercepted by air defenses. The exchange represents the most direct confrontation between the two adversaries in years, with Israeli strikes hitting targets deep inside Iranian territory rather than through proxy forces.

International reaction and market implications

The U.S. administration labeled Israel's action as unilateral, with President Donald Trump convening an emergency cabinet meeting. NATO officials emphasized that while a nuclear clash appears unlikely, the situation risks severe regional destabilization. Oil futures jumped nearly 4% in early trading as analysts warned of potential supply disruptions from the Persian Gulf.

"This crosses a red line we haven't seen before," said a European diplomat familiar with the situation, speaking on condition of anonymity due to the sensitivity of the matter. "The question now is whether Tehran will feel compelled to respond through its regional proxies or attempt further direct strikes."

Escalating tensions with global consequences

The conflict stems from long-standing tensions over Iran's nuclear program and Israel's determination to prevent Tehran from obtaining nuclear weapons. Recent months saw increasing drone attacks on Israeli-linked vessels and infrastructure, which analysts now view as precursors to this week's dramatic escalation.

Defense stocks surged in pre-market trading as investors anticipated increased military spending, while airlines rerouted flights to avoid potential conflict zones. The shekel fell to a three-month low against the dollar as investors sought safer assets.

[Updates throughout with latest drone interception rates and market reactions]