The US-Iran war widened sharply yesterday after a US submarine sank an Iranian warship off Sri Lanka, killing at least 80 people, and Nato air defences destroyed an Iranian ballistic missile fired towards Türkiye.
The escalation came as the powerful son of Iran’s slain supreme leader emerged as a frontrunner to succeed him, suggesting Tehran was not about to buckle to pressure, five days after the US and Israel launched a military campaign that has killed hundreds and convulsed global markets.
The missile incident is the first time that Türkiye – which borders Iran and has Nato’s second-largest military – has been drawn into the conflict, but US Defence Secretary Pete Hegseth said there was no sense that it would trigger the Atlantic alliance’s collective-defence clause.
In a sign of the conflict’s expanding reach, Hegseth said the US submarine strike hit an Iranian vessel off Sri Lanka’s southern coast, thousands of kilometres from the Gulf, as fighting paralysed shipping through the Strait of Hormuz for a fifth day, choking off vital Middle East oil and gas flows.
US President Donald Trump has pledged to provide insurance and naval escorts for ships exporting energy from the region to contain soaring costs, with oil prices still stuck yesterday at their highest in more than a year.
But at least 200 vessels remain anchored off the coast, according to Reuters estimates.
The US and Israel pressed on with their round-the-clock assaults on Iran, with Hegseth saying the US was winning the conflict.
“This was never meant to be a fair fight, and it is not a fair fight. We are punching them while they’re down,” Hegseth, sounding supremely confident, said at a briefing at the Pentagon.
“We can sustain this fight easily for as long as we need to.”
By contrast, Iran is firing fewer missiles, signalling its military capabilities are greatly diminished, said Dan Caine, the chairman of the US Joint Chiefs of Staff.
Reflecting that, the Israeli military said it was easing public safety instructions across Israel today through Saturday, allowing businesses to open as long as they were at a close enough distance to shelters and other protected areas while keeping schools closed.
The Israeli military said its aircraft had struck a compound in eastern Tehran housing all Iran’s security bodies, including the Republican Guard, intelligence, cyber warfare and internal police in charge of cracking down on protests.
Israel also told residents to leave a swathe of southern Lebanon yesterday as it presses its assault on the Iran-backed group Hizbollah, which has again dragged Lebanon into conflict by firing drones and rockets into Israel on Monday.
A fall in global markets turned into a rout in Asia, including a record-breaking crash in Seoul, as some investors were unconvinced by Trump’s assurances he would quickly reopen the world’s most important shipping corridor.
European markets later stabilised and turned higher after two days of sharp losses, while US stocks closed up yesterday, on hopes that the war might end soon.
Some traders said the improved sentiment followed a New York Times report that Iranian intelligence had reached out to the CIA early in the war about a path towards ending it.
A source from the Iranian intelligence ministry rejected the article as “absolute lies and psychological warfare in the midst of war”, Iran’s semi-official news agency Tasnim reported.
As new explosions rang out in Tehran, plans were in doubt for a funeral for the elder Ayatollah Ali Khamenei, 86, killed by Israeli forces on Saturday in the first assassination of a nation’s top ruler by an air strike.
The body had been expected to lie in state in a vast Tehran mosque from yesterday evening, but Iran announced that three days of farewell ceremonies had been indefinitely postponed and no funeral date has been announced.
Two Iranian sources told Reuters that Mojtaba Khamenei, son of Iran’s slain supreme leader, was not in Tehran when his father was killed.
Iran said the Assembly of Experts that will select the new leader would announce its decision soon, only the second time it will have done so since the Islamic Republic’s founding in 1979.
Assembly member Ayatollah Ahmad Khatami told state TV the candidates had already been identified but did not name them.
Israel said it would hunt down whoever was chosen.
Other candidates for supreme leader include Hassan Khomeini, grandson of the Islamic Republic’s founder and a champion of the reformist faction sidelined in recent decades.
The favourite, however, appears to be Mojtaba Khamenei, who has amassed power as a senior figure in the security forces and the vast business empire they control, the Iranian sources said.
Choosing him would signal that hardliners remain in charge.
US Central Command said in a statement it had “struck or sunk to the bottom of the ocean” more than 20 Iranian ships, including the warship sunk off Sri Lanka in the first such action by a US submarine since the Second World War.
A Sri Lankan official identified the boat as the frigate IRIS Dena, saying it had been heading back to Iran from eastern India.
Local authorities said 32 people had been rescued while 87 bodies had been recovered. About 60 sailors were unaccounted for from the estimated 180-strong crew.
“An American submarine sunk an Iranian warship that thought it was safe in international waters,” said Hegseth, the US defence secretary. “Instead, it was sunk by a torpedo. Quiet death.”
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