Iran on Thursday threatened "crushing" attacks on the United States and Israel, firing missiles at Tel Aviv after President Donald Trump vowed to bomb the Islamic Republic "back to the Stone Ages."
The war, which was started more than a month ago by U.S.-Israeli strikes on Iran, has spread throughout the Middle East and roiled the global economy.
In a White House address, Trump warned U.S. attacks would intensify if Iran did not reach a negotiated settlement.
"Over the next two to three weeks, we are going to bring them back to the Stone Ages, where they belong," he said.
Iran's response was immediate, with Israeli air defenses pressed into action. Four people were reportedly lightly injured in the Tel Aviv area.
AFP journalists in Jerusalem heard fresh blasts on Thursday evening after the Israeli military warned of Iranian missiles. Later, it said another missile had been launched, from Yemen.
In Tehran, AFP journalists reported a series of loud explosions, sending reverberations across the city. The targets were unclear.
Iranian state TV said that U.S.-Israeli strikes hit a bridge in Karaj, west of Tehran, twice on Thursday, with the first strike leaving two civilian casualties and the second coming as emergency teams were deployed.
Trump took to social media to boast about sending the bridge "tumbling down," promising "much more to follow!"
The country's two largest steel plants have meanwhile been forced offline by several waves of U.S. and Israeli attacks, the companies said.
Despite the bombardments, families gathered at Tehran's Melat park, with men smoking water pipes and children running around playgrounds, to mark the 13th day after Nowruz, the Persian New Year, when people traditionally picnic outdoors, AFP journalists said.
A resident told AFP there was an increase in checkpoints throughout the city manned by Iran's Revolutionary Guards.
"They gather in the streets in order to show people that they are still in power and nothing is gonna change," said the 30-year-old man, who requested his name not be used.
In Israel, Jewish Israelis were celebrating Passover, which some were forced to do underground.
"This is not my first choice," said a writer who gave his name as Jeffrey, at a meal organized in a Tel Aviv bunker.
'Much More Reasonable'
The war continues to disrupt shipping, with British Foreign Secretary Yvette Cooper leading a meeting of some 40 countries demanding "the immediate and unconditional reopening" of the Strait of Hormuz, through which one-fifth of the world's oil usually passes.
Iran's Revolutionary Guards all but shut the key waterway when the United States and Israel launched the war, and Trump has made its reopening a condition for a ceasefire.
Italy called for a "humanitarian corridor" to be opened through the strait for fertilizer, to head off a food disaster in Africa.
Tehran meanwhile said it was drafting a postwar protocol that would supervise the strait's maritime traffic with Oman, though it said it was yet to begin negotiations with Muscat.
Trump has said talks to end the war could be possible with Iran's new leadership, which he described as "less radical and much more reasonable" than their predecessors.
Tehran has dismissed Washington's ceasefire overtures, describing U.S. demands to end the conflict as "maximalist and irrational."
"Messages have been received through intermediaries, including Pakistan, but there is no direct negotiation with the U.S.," said Iranian foreign ministry spokesman Esmaeil Baqaei, quoted by the ISNA news agency Thursday.
Trump warned that if no agreement with Tehran was struck, Washington had "our eyes on key targets including the country's electric generating plants."
The country's health ministry said the Pasteur Institute of Iran, a century-old medical center in Tehran, had been extensively damaged in a strike.
In Lebanon, Iran-backed militant group Hezbollah said its fighters launched drones and rockets at northern Israel on Thursday.
A day earlier, Israel killed a top Hezbollah commander, two sources told AFP, in a Beirut strike that the Lebanese health ministry said killed seven people.
Eighteen European countries called on Thursday for Israel and Hezbollah to stop fighting as fears mounted over Israeli plans to control part of southern Lebanon postwar.
International Organization for Migration chief Amy Pope told AFP the prospects for prolonged mass displacement in Lebanon were "very alarming."
In Iraq, a drone attack targeted the U.S. diplomatic and logistics center in Baghdad's international airport complex, two Iraqi security sources told AFP.
From Iraq to Bhutan
The conflict has drawn in Gulf countries once seen as a safe haven in a volatile region, with air defenses in the United Arab Emirates responding to missile and drone attacks on Thursday.
World Bank Managing Director Paschal Donohoe told AFP the institution was "extremely concerned" about the war's impact on inflation, jobs, and food security worldwide.
Airlines in China have said they will hike fuel surcharges, and Malaysian civil servants are being asked to work from home.
Iraq's oil export revenues in March dropped more than 70% from February, an Iraqi official said Thursday.
Even the Himalayan kingdom of Bhutan is feeling the impact as fuel prices spike.
AFP reporters in the capital Thimphu saw long lines at gas stations on Thursday amid shortages in the landlocked nation of around 800,000 people.
"It's not like our government is responsible, they are trying their best," said Karma Kalden, 40.
"We are helpless."