Iran fired missiles Wednesday at Iraqi bases used by the US military, officials in Washington and Tehran said, in the first act of the Islamic republic's promised revenge for the US killing of a top Iranian general.
The Pentagon said it was still "working on initial battle damage assessments" after "Iran launched more than a dozen ballistic missiles against US military and coalition forces in Iraq."
"It is clear that these missiles were launched from Iran and targeted at least two Iraqi military bases hosting US military and coalition personnel at Al-Assad and Irbil," the Pentagon said.
There were no immediate reports on casualties but the Pentagon said it had been ready, after days of steadily mounting tension and exchanges of threats of war.
"These bases have been on high alert due to indications that the Iranian regime planned to attack our forces and interests in the region," a spokesman said.
Iranian state television reported an attack on one base housing US personnel, saying it was in response to Friday's killing in a US drone strike of Iranian general Qasem Soleimani, one of the most important figures in the country's government.
Also killed was a top Iraqi commander Abu Mahdi al-Muhandis, who was with Soleimani just outside Baghdad international airport when the US drone struck.
The Iranian Revolutionary Guards announced that the Ain al-Assad base was hit with dozens of missiles, warning that a US counter-attack would be met with an even "more crushing response."
In Washington, US president Donald Trump was "monitoring the situation closely and consulting with his national security team," according to the White House.
Oil prices immediately jumped on the news, with the benchmark WTI spiking more than 4.5 per cent to $65.54 a barrel before receding slightly.
Tension and threats
The potentially lethal new development followed days of sabre rattling between Washington and Tehran, coupled with growing confusion over the future of US troops in Iraq.
At Soleimani's funeral in Iran, top Revolutionary Guards commander major general Hossein Salami said Iran would "take revenge."
If further US attacks occur, "we will set fire to what they love," he said.
Trump warned that "if Iran does anything that they shouldn't be doing, they're going to be suffering the consequences and very strongly."
He called Soleimani "a monster."
Trump, however, did walk back earlier threats to bomb Iranian cultural sites in the event of conflict -- something that could be a war crime.
"If that's what the law is, I like to obey the law," Trump said.
In the Iranian city of Kerman, meanwhile, tragedy deepened an already highly tense situation when more than 50 people died in a crowd stampede at Soleimani's funeral, Iranian media reported.
The influential figure, responsible for Iran's regional network of official and unofficial military allies, was due to be buried in his home town when the crowd got out of control.
Foreign troops waver
Trump sought to end confusion over the status of the approximately US 5,200 troops in Iraq, saying they should stay despite calls by the Iraqi parliament for their expulsion.
"At some point we want to get out, but this isn't the right point," Trump told reporters at the White House.
But despite Washington's assurances that the US troops will stay put, several allies started to leave, raising questions over the future of a US-led mission to help the Iraqis fight the jihadist Islamic State group.
Canada announced that some of its estimated 500 troops will withdraw to Kuwait. And NATO, which suspended its training mission in Iraq after the killing, said it also was temporarily "repositioning" some personnel to locations inside and outside Iraq.
Several other countries, including Germany and Romania, announced plans to move forces. France said it had no intention of withdrawing its troops from Iraq.
Italy also said that after a "frank and articulate" phone call between defense minister Lorenzo Guerini and Esper that its approximately 1,000 soldiers in the country would stay.
US attempts to clarify
On Sunday the Iraqi parliament voted in favor of expelling US troops in response to Soleimani's killing.
Then on Monday, a letter emerged from the head of Task Force-Iraq, US brigadier general William Seely, that appeared to announce just such an exit.
Back in Washington, US officials scrambled to deny the idea, calling the letter a mistakenly released draft or, as Trump suggested, a fake.
"I don't know anything about that letter," Trump told reporters. "I understand it was an unsigned letter. I don't know if that letter was a hoax, or was it unsigned or what."
Iraq's prime minister, however, insisted Tuesday that the letter had been taken seriously.
"It was an official letter written in such a manner," Abdel Mahdi told a televised cabinet meeting.
"It's not a piece of paper that fell off the printer or reached us by coincidence," he said.
Attempting to draw a line under the issue, US defense secretary Mark Esper said that "policy has not changed. We are not leaving Iraq."
Trump said he favored eventual withdrawal from Iraq but that under the wrong conditions it would mean a strategic gift to Iran.
"If we leave, that would mean that Iran would have a much bigger foothold, and the people of Iraq do not want to see Iran run the country. That I can tell you," Trump told reporters.
"It's the worst thing that could happen to Iraq."