Iran and Israel announce more strikes as conflict enters fourth day

Both Iran and Israel issued new evacuation orders Monday as the two regional powers continued firing missiles at each other for a fourth straight day.

Monday evening local time, the Israel Defense Forces warned residents in parts of northern Tehran that the Israeli army will attack Iran's military infrastructure there in the coming hours.

Meanwhile, Iranian state media reported that the country's Islamic Revolutionary Guard Corps announced it will launch its own attacks against Israel's military infrastructure in the Bnei Brak area of eastern Tel Aviv, according to NBC News.

"Your presence in this area puts your life at serious risk," the Guard said, in a statement that NBC reported.

Israel's defense minister warned earlier Monday that Tehran will "pay the price" for its fresh missile onslaught.

A live broadcast of the Islamic Republican of Iran News Network was interrupted Monday evening when the studio appeared to be struck by a missile. Video of the moment shows a news anchor abruptly stop speaking and leave her desk as debris and smoke billow into the frame.

Fire exchanges have continued since Israel's Friday attack against Iran, with Iranian media reporting Tehran's latest strikes hit Tel Aviv, Jerusalem and Haifa, home to a major oil refinery. CNBC has reached out to operator Bazan for comment on the state of operations at the Haifa plant, amid reports of damage to Israel's energy infrastructure.

Iran's Guard said overnight it deployed "innovative methods" that "disrupted the enemy's multi-layered defense systems, to the point that the Zionist air defense systems engaged in targeting each other," according to a statement obtained by NBC News.

Israel has widely depended on its highly efficient Iron Dome missile defense system to fend off attacks throughout regional conflicts — but even it can be overwhelmed if a large number of projectiles are fired.

On Monday, the Israel Defense Forces claimed they had "achieved full aerial superiority over Tehran's skies" after previously saying they had deployed 50 fighter jets and aircraft in a coordinated strike mission. CNBC could not independently verify the report.

Iran has long struggled with an ageing aircraft fleet and has previously turned to Russia for fighter jet purchases.

The fresh hostilities are front-of-mind for investors, who have been weighing the odds of further escalation in the conflict and spillover into the broader oil-rich Middle East, amid concerns over crude supplies and the key shipping lane through the Strait of Hormuz connecting the Persian Gulf and the Gulf of Oman.

Oil prices retained the gains of recent days and at 1:11 p.m. London time, Ice Brent futures with August delivery were trading at $73.46 per barrel, down 1.04% from the previous trading session. The Nymex WTI contract with July expiry was at $72.14 per barrel, 1.15% lower.

Elsewhere, however, markets showed initial signs of shrugging off the latest hostilities early on Monday.

Spot prices for gold, a key safe-haven asset, fell nearly 1% to about $3,419 per ounce by 12:20 p.m. ET on Monday after nearly notching a two-year-high earlier in the session.

Tel Aviv share indices rose around the same time, with the blue-chip TA-35 up 1.82% and the wider TA-125 up 2.64% .

European and U.S. stock markets also opened higher.

Luis Costa, global head of EM sovereign credit at Citigroup Global Markets, signaled the muted reaction could be, in part, attributed to hopes of a brisk resolution to the conflict.

"So markets are obviously, you know, bearing in mind all potential scenarios. There are obviously potentially very bad scenarios in this story," he told CNBC's "Europe Early Edition" on Monday. "But there is still a way out in terms of, you know, a faster resolution and bringing Iran to the table, or a short continuation here, of a very surgical and intense strike by the Israeli army."

As of Monday morning, Israel's national emergency service Magen David Adom reported four dead and 87 injured following rocket strikes at four sites in "central Israel," reporting collapsed buildings, fire and people trapped under debris.

Accusing Tehran of targeting civilians in Israel to prevent the IDF from "continuing the attack that is collapsing its capabilities," Israeli Defense Minister Israel Katz, a close longtime ally of Prime Minister Benjamin Netanyahu, said in a Google-translated social media update that "the residents of Tehran will pay the price, and soon."

He clarified in a later Google-translated update that "the residents of Tehran will be forced to pay the price of dictatorship and evacuate their homes from areas where it will be necessary to attack regime targets and security infrastructure in Tehran."

The IDF on Sunday said it had in turn "completed a wide-scale wave of strikes on numerous weapon production sites belonging to the Quds Force, the IRGC and the Iranian military, in Tehran."

CNBC could not independently verify developments on the ground.

The U.S.' response is now in focus, given its close support and arms provision to Israel, the unexpected cancellation of Washington's latest nuclear deal talks with Iran, and President Donald Trump's historically hard-hitting stance against Tehran during his first term.

Trump, who has been pushing Iran for a deal over its nuclear program, has weighed in on the conflict, opposing an Israeli proposal to kill Iran's supreme leader, Ayatollah Ali Khamenei, according to NBC News.

Discussions about the conflict are expected to take place during the ongoing meeting of the G7, encapsulating Canada, France, Germany, Italy, Japan, the U.K. and the U.S., along with the European Union.

— CNBC's Katrina Bishop contributed to this report.