The war between Iran, Israel and the United States is entering a volatile new phase, with leaders on all sides striking defiant tones as the conflict nears its two-week mark and the toll in lives, economic damage and regional instability continues to rise.

More than 2,000 people have been killed since fighting erupted on Feb. 28, most of them in Iran, while hundreds more have died in Lebanon amid Israeli strikes targeting Hezbollah positions.

The widening confrontation has rattled financial markets, pushed oil prices sharply higher and raised fears of prolonged disruption to global energy supplies.

Iran’s new leader breaks his silence

Iran’s newly installed supreme leader, Ayatollah Mojtaba Khamenei, issued his first public statement Thursday, pledging retaliation and warning Gulf Arab states against supporting the United States.

The message, read by a state television presenter rather than delivered in person, promised Iran would keep the strategically crucial Strait of Hormuz closed and suggested neighboring countries hosting American bases could become targets.

"I assure everyone that we will not neglect avenging the blood of your martyrs,” the hardline cleric said.

Khamenei has not appeared publicly since the war’s opening strikes killed his father, longtime leader Ayatollah Ali Khamenei, and wounded him. Iranian officials say the injuries were minor.

Closely aligned with Iran’s powerful Revolutionary Guard, the younger Khamenei is widely viewed as more uncompromising than his predecessor. In his remarks, he warned Iran could open "other fronts” if the war continues.

Netanyahu hints at regime change

Israeli Prime Minister Benjamin Netanyahu, speaking at his first news conference since the start of the campaign, said Israel’s military pressure could eventually destabilize Iran’s leadership.

"We are creating the optimal conditions for the fall of the regime,” Netanyahu said, addressing the Iranian public directly. "But a regime is toppled from the inside.”

Netanyahu stopped short of confirming whether Israel intends to target Khamenei personally but issued a veiled threat while defending the ongoing air campaign.

Israel’s military said its air force struck more than 200 targets across western and central Iran over the past 24 hours, including missile launchers, air defense systems and weapons manufacturing sites. The operation has been dubbed "Roar of the Lion.”

Israeli officials also said strikes had killed a senior Iranian nuclear scientist and damaged additional nuclear facilities.

Iran fires back

Despite Israeli and U.S. claims that Iran’s long-range arsenal has been severely degraded, Tehran launched another barrage of missiles overnight toward Israel.

Israeli medics reported 58 people treated for injuries in the north of the country, most suffering cuts from shattered glass.

Elsewhere in the region, the conflict’s reach continued to spread.

Saudi Arabia said its air defenses intercepted dozens of drones heading toward its Eastern Province, while the United Arab Emirates reported debris from a missile interception caused minor damage to a building in Dubai.

Two drones were also shot down in eastern Saudi Arabia.

Shipping lanes and oil infrastructure have become frequent targets.

Tankers were set ablaze earlier this week in Iraq’s southern port of Basra after suspected Iranian explosive boats struck them, and other vessels have been hit near the Strait of Hormuz.

Oil shock rattles markets

The threat to energy supplies has shaken global markets. Oil prices surged roughly 9 percent to around $100 per barrel, while U.S. stocks posted their steepest three-day drop in a month and Asian markets also slipped.

About one-fifth of the world’s traded oil normally passes through the Strait of Hormuz, giving Iran enormous leverage over global energy flows.

To stabilize markets, the U.S. Treasury issued a temporary 30-day license allowing countries to purchase Russian oil already stranded at sea, easing sanctions in an effort to boost supply.

Treasury Secretary Scott Bessent described the price surge as a temporary disruption that could ultimately benefit the United States, the world’s largest oil producer.

President Donald Trump struck a similar tone, arguing that higher prices could boost U.S. revenues while reiterating that preventing Iran from acquiring nuclear weapons remains the priority.

"We have unparalleled firepower, unlimited ammunition, and plenty of time,” Trump wrote on social media. "Watch what happens to these deranged scumbags today.”

Domestic backlash in the U.S.

Trump’s comments triggered anger among Democrats, who accused the administration of downplaying the war’s human cost and demanded greater transparency.

Lawmakers called for details on civilian casualties and questioned reports of an airstrike that killed dozens of children at a girls’ school in Iran.

The White House has yet to provide a clear estimate of the war’s potential cost or duration, and officials have offered differing explanations for why the conflict began.

Polls indicate the war remains unpopular with many Americans.

Fighting spreads across the region

The conflict’s ripple effects are being felt across the Middle East.

In Iraq, U.S. Central Command said rescue operations were underway after an American refueling aircraft went down following an incident involving another plane.

Officials said the crash was not caused by hostile fire, though an Iran-backed militia group claimed responsibility.

France confirmed one of its soldiers was killed and several wounded during an attack near Irbil in northern Iraq, while British officials said American personnel suffered minor injuries after drone strikes on a base hosting U.S. and U.K. forces.

Meanwhile, Israeli warplanes continued heavy bombardment in Lebanon, including strikes near central Beirut. Lebanese authorities said several civilians were killed, including children.

Life under pressure in Iran

Inside Iran, residents say security forces have intensified their presence as authorities attempt to maintain control.

"Security forces are everywhere, more than before,” said Majan, a 35-year-old teacher in Tehran reached by phone. "People are afraid to come out, but supermarkets are open.”

Israel and the United States have urged Iranians to rise up against the government. While many Iranians resent the ruling clerical establishment, there has been little sign of organized opposition while the country remains under attack.

Iranian officials say their strategy now is to impose economic pressure on the West through energy disruption. Military spokespeople have warned the world to prepare for oil prices potentially reaching $200 per barrel.

U.S. Energy Secretary Chris Wright said that scenario remains unlikely but acknowledged the uncertainty.

"I would say unlikely,” Wright said. "But right now the focus is on the military operation and resolving the problem.”