Israel has launched a new wave of strikes on Tehran, Iran on Sunday, saying it aimed to dominate the skies after killing Iran’s supreme leader and leaving the Islamic Republic grappling to rebuild its leadership amid its biggest test in five decades.

U.S. and Israeli strikes and Iranian retaliation have sent shockwaves through sectors from shipping to air travel to oil, amid warnings of rising energy costs and disruption to business in the Gulf, a strategic waterway and global trade hub.

Iranian President Masoud Pezeshkian said a leadership council composed of himself, the judiciary head and a member of the powerful Guardians Council had temporarily assumed the duties of Supreme Leader following the death of Ayatollah Ali Khamenei.

The U.S. military said it had sunk an Iranian ship, while Iran’s Revolutionary Guards said they had launched an attack on the U.S. aircraft carrier Abraham Lincoln with four ballistic missiles, state media reported.

In a sign of widening turmoil, Israel’s ambulance service said nine people were killed by a missile strike in the town of Beit Shemesh, the United Arab Emirates said Iranian attacks killed three people and Kuwait reported one dead in Iranian raids.

The Israeli military said that over the past day Israeli planes had conducted strikes to open the “path to Tehran”, and the majority of aerial defence systems in western and central Iran had been dismantled.

“Ali Khamenei was targeted in a precise, large-scale operation carried out by the Israeli Air Force, guided by accurate IDF intelligence, while he was in his central leadership compound in the heart of Tehran, where he was together with additional senior officials”.

Israeli military spokesperson Lieutenant Colonel Nadav Shoshani said many targets remained, including sites of military‑industrial production.

“We have the capabilities and the targets to keep going on for as long as necessary,” he said.

Asked if Israel was considering deploying ground forces, Shoshani said that was not under consideration even though U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu have urged Iranians to seize a rare opportunity to topple their leaders.

Hours after the U.S. and Israel said an air strike killed Khamenei, Iran’s state media confirmed the 86-year-old leader had died.

Inside Iran, some grieved for Khamenei while others celebrated his death, exposing a deep fault line in a country stunned by the sudden demise of the man who ruled for decades.

Thousands of Iranians were killed in a crackdown authorised by Khamenei against anti-government protests in January, the deadliest wave of unrest since the Islamic Revolution of 1979.

Footage from Tehran showed mourners packed into a square, dressed in black and many of them weeping.

However, videos posted on social media also showed joy and defiance elsewhere, with people cheering as a statue was toppled in the city of Dehloran in Ilam province, dancing in the streets of Karaj city, near Tehran in Alborz province, and celebrating in the streets of Izeh in Khuzestan province.

Khamenei, who built Iran into a powerful anti-U.S. force and spread its sway across the Middle East during his 36-year iron-fisted rule, was working in his office at the time of Saturday’s attack, state media said.

The raid also killed his daughter, grandchild, daughter-in-law and son-in-law.

Two U.S. sources and a U.S. official familiar with the matter said Israel and the U.S. timed their attack on Saturday to coincide with a meeting Khamenei was holding with top aides.

Experts said that while his death and those of other Iranian leaders would deal Iran a major blow, it would not necessarily spell the end of Iran’s entrenched clerical rule or the sway of the elite Revolutionary Guards over the population.

As supreme leader, Khamenei held ultimate power in Iran, acting as commander-in-chief of the armed forces and deciding on the direction of foreign policy, defined largely by confrontation with the United States and Israel.

Meanwhile, Russian President Vladimir Putin has denounced Khamenei’s death, China’s Foreign Minister Wang Yi described it as “blatant killing”, while European Union foreign policy chief Kaja Kallas said the death of Khamenei was “a defining moment in Iran’s history”.

After Iran retaliated with airstrikes around the Gulf, Anwar Gargash, adviser to the president of U.S. ally and oil power the United Arab Emirates, urged Tehran to “go back to your senses”, saying the war is not with Iran’s Gulf Arab neighbours.

The UAE has so far borne the brunt of Iran’s retaliation.

Trump warned on Sunday that the U.S. would hit Iran “with a force that has never been seen before” if it strikes back after the attacks on it.

In a sign of disruption to energy supplies, at least 150 tankers including crude oil and liquefied natural gas vessels dropped anchor in open Gulf waters beyond the Strait of Hormuz and dozens more were stationary on the other side of the chokepoint, shipping data showed on Sunday, after the U.S and Israeli strikes.

The oil tankers were clustered in open waters off the coasts of major Gulf oil producers including Iraq and Saudi Arabia as well as LNG giant Qatar.

In other regional repercussions, Pakistani police on Sunday clashed with protesters who breached the outer wall of the U.S. consulate in Karachi, leaving nine people dead, following news of Khamenei’s death.

Khamenei had a following among fellow Shi’ites outside Iran in countries such as Iraq and Pakistan, which have the largest Shi’ite populations after Iran.

In Iraq, police fired tear gas and stun grenades to scatter hundreds of pro-Iranian protesters who gathered outside the Green Zone in Baghdad, where the U.S. Embassy is located.

Global air travel remained heavily disrupted as continued air strikes kept major Middle Eastern airports, including Dubai – the world’s busiest international hub – closed in one of the biggest aviation interruptions in recent years.

Several blasts were heard for a second day in Dubai and over Qatar’s capital of Doha, witnesses said.

Iran, which had said it would target U.S. bases if attacked, hit a range of other targets, keeping the Gulf on edge.

Trump said the air strikes aimed to end a decades-long threat from Iran and ensure it could not develop a nuclear weapon.

He also sought to justify a risky gambit that seemed to contradict his professed opposition to American involvement in complex overseas conflicts.

Reuters/Olaolu Fawole