The US and Israeli strikes - and Iranian retaliation - sent shockwaves through sectors from shipping to air travel to oil, amid warnings of rising energy costs and disruption to business in the strategic waterway, a 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.
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 its air force had killed Khamenei, adding that over the past day Israeli planes conducted strikes to open the "path to Tehran", and the majority of aerial defence systems in western and central Iran had been dismantled.
Asked whether Israel was considering deploying ground forces to Iran, Israeli military spokesperson Lieutenant Colonel Nadav Shoshani said that was not under consideration even though US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu have urged Iranians to seize a rare opportunity to topple their leaders.
Hours after the US and Israel said an air strike killed Ayatollah Ali Khamenei in the military campaign to overthrow the government of the Islamic Republic, Iran's state media confirmed the 86-year-old leader had died.
The raid also killed his daughter, grandchild, daughter-in-law and son-in-law.
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 during 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.
But 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. Reuters has verified the locations of these videos.
Iran's Foreign Minister Abbas Araghchi said a new supreme leader would be chosen in "one or two days" to signal stability and continuity.
Under Iran's constitution, the Supreme Leader is appointed by the Assembly of Experts, an 88-member clerical body that supervises and in theory can sack that figure.
Russian President Vladimir Putin denounced Khamenei's death as a cynical murder and 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".
Pope Leo told pilgrims in St. Peter's Square he is following events after the strikes with "deep concern" and appealed for a halt to what he called a "spiral of violence".
Trump warned on Sunday that the US would hit Iran "with a force that has never been seen before" if it strikes back after the attacks on it.
In remarks directed at Trump and Netanyahu, Iran's parliament speaker Mohammad Baqer Qalibaf said "we will strike you with such terrifying blows that you yourselves will be driven to beg".
"I say to Trump and Netanyahu and their agents and proxies, I repeat, I say to these two filthy criminals and to all their agents: you have crossed our red line, and you must pay the price for it."
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 US and Israeli strikes.
