Iran inflicted a 'crushing setback' on its foes, according to the nation's top leader

Iran's Supreme Leader Mojtaba Khamenei declared on Friday that the country has delivered a "dizzying blow" to its enemies in the ongoing conflict with the United States and Israel, as Tehran experienced fresh blasts on the first day of the Persian New Year festival.

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Meanwhile, Israel accused Tehran of launching an "attack on the holy sites" of Jerusalem, following a blast that created a crater in the Old City, just a few hundred meters from the Al-Aqsa Mosque, the Western Wall, and the Church of the Holy Sepulchre.

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Khamenei, who has not appeared in public since being named to succeed his father Ali Khamenei, issued a written statement for Nowruz, the Persian New Year, stating that Iranians have "dealt him a dizzying blow so that he now starts uttering contradictory words and nonsense".

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In the same message, Khamenei asserted that "at the moment, due to the particular unity that has been created between you our compatriots — despite all the differences in religious, intellectual, cultural and political origins — the enemy has been defeated".

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This statement of defiance came as Iranians celebrated a subdued Nowruz, with the war now approaching its fourth week, and AFP journalists reporting several blasts in Tehran on Friday, originating from the eastern and northern parts of the city.

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In Tehran's markets, shoppers were out in large numbers purchasing new clothes and gifts, although the sidewalks were less crowded than usual, with many people having fled north, according to AFP correspondents.

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Huge banners featuring images of Nowruz have replaced portraits of the former leader Ali Khamenei, who was assassinated on the first day of the war on February 28 by Israel.

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Israel confirmed that Ismaeil Ahmadi, the chief of Iran's Basij paramilitary force, was "eliminated" in a strike earlier in the week that also killed its top commander.

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The Israeli army targeted a northern region around the Caspian Sea, a popular holiday destination that has largely been spared attacks so far.

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A blast in Jerusalem's Old City was caused by "Iranian missile fragments", according to the Israeli military, prompting an angry response from Israel's foreign ministry.

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The foreign ministry described the attack as an "Iranian gift" for the Muslim holiday of Eid al-Fitr, stating that "The Iranian attack on the holy sites sacred to all three religions reveals the madness of the Iranian regime, which claims to be religious".

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On Thursday, Israeli Prime Minister Benjamin Netanyahu suggested that an end to the fighting could be near, stating that Iran was "being decimated" and the war was "ending a lot faster than people think", although he warned that a "ground component" may be needed to dislodge the Iranian government.

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French Foreign Minister Jean-Noel Barrot said that "major concessions — a radical change of stance" would be necessary from Iran to secure a lasting political end to the war.

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The conflict has sent global energy markets into turmoil, with Iran all but closing the Strait of Hormuz, a crucial transit route for tankers leaving the Gulf, and strikes on oil and gas infrastructure causing panic among traders.

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Drone attacks hit Kuwait's giant Mina Al-Ahmadi refinery on Friday, causing a fire that was later brought under control, a day after a direct hit on Qatar's vital Ras Laffan facility.

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US President Donald Trump criticized his NATO allies, branding them "cowards" for rebuffing his call to send military hardware to reopen Hormuz, which normally carries a fifth of the world's oil and liquefied natural gas (LNG).

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Trump posted on his Truth Social platform that US allies "don't want to help open the Strait of Hormuz, a simple military maneuver that is the single reason for the high oil prices", adding "So easy for them to do, with so little risk. COWARDS, and we will REMEMBER!".

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Six major international powers, including Britain, France, Germany, and Japan, said on Thursday that they were ready to "contribute to appropriate efforts" to secure the strait, without making any specific commitments.

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Energy analysts and consumers are assessing the cost of Iranian missiles hitting Qatar's huge Ras Laffan natural gas complex on Thursday, which caused "extensive damage" that could cost $20 billion a year in lost revenue and take five years to repair.

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This could lead to high energy prices that outlast the conflict, resulting in increased inflation and lower economic growth, as "Short disruptions create price volatility. Sustained damage creates lasting economic shock", according to Robert Pape, a political science and military expert at the University of Chicago.

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Spain became the latest country to take action to cushion the economic impact of the war, announcing a five-billion-euro package including a VAT cut on petrol to slash pump prices.

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The war, which has killed thousands and displaced millions, quickly spread to Lebanon, where the Israeli military has carried out regular bombardments in response to rocket fire on Israel by Iran ally Hezbollah.

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Lebanon's health ministry reported that the death toll from Israeli airstrikes on southern and eastern Lebanon, as well as on the capital Beirut and its southern suburbs, has surpassed 1,000.

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NATO has pulled its mission in Iraq back to Europe, the alliance said on Friday, with the mission having been based in an Iraqi military base in Baghdad's Green Zone near the US embassy, which has been targeted several times since the start of the war.