The US launched a fresh wave of strikes in response to Iranian forces hitting a ship passing through the Strait of Hormuz.
In response to the American strikes, Iran's Islamic Revolutionary Guard Corps (IRGC) said the waterway was closed until further notice and launched attacks on US bases and allies in the region.
The IRGC said it had hit a US base in Jordan, while the United Arab Emirates, Qatar, Kuwait and Bahrain all responded to missiles and drones from Iran.
It comes after incidents earlier this week in which three commercial tankers were attacked, prompting an exchange of strikes between the US and Iran.
Earlier on Sunday, state media said Iran had closed the Strait until further notice after firing a naval cruise missile at a vessel that was attempting to sail along an unapproved route.
The Guards said the vessel was "hit by warning shots and stopped" after ignoring repeated instructions, according to a statement carried by state news agency.
It also warned that any US "aggression" as a result of the closure would be responded to with "severity" and new bases in the region would be targeted.
Iran's parliamentary speaker Mohammad Bagher Ghalibaf, who is also the country's chief negotiator with the US, wrote on X that the "era of one-sided deals is OVER".
He went on: "We told you: keep your word or pay the price. Reality is knocking."
Launching a third round of strikes this week, US Central Command (Centcom) the IRGC "blatantly attacked" a Cyprus-flagged vessel in the Strait of Hormuz.
Centcom said the MV GFS Galaxy was "unable to continue its journey" as a result of significant damage to the engine room. A crew member was missing, it added.
The UK's Maritime Trade Operations (UKMTO) said it had been informed by military authorities that the crew of the vessel were forced to abandon ship and were in a lifeboat.
"Iran was provided yet another opportunity to demonstrate adherence to the Memorandum of Understanding after being held accountable for earlier attacks on commercial vessels but has again failed," Centcom wrote in a statement shared to X.
It said US strikes hit 140 Iranian military targets, including missile and drone sites, communication networks, and coastal surveillance locations.
The statement was shared by US Secretary of Defense Pete Hegseth, who wrote: "Iran made a poor choice. Now they pay."
The IRGC said the US had targeted "a number of coastal bases and telecommunications towers on the southern coast".
In response, Iran said its "first phase" of retaliation included strikes on the Prince Hassan Air Base in Jordan, saying it had destroyed the base's command and control centre and MQ9 drone hangars.
The closure follows a call for revenge from Iranian Supreme Leader Ayatollah Mojtaba Khamenei, in his first public statement since taking leadership.
His father and predecessor, Ali Khamenei, was killed in an air strike on 28 February, on the first day of the US-Israeli war against Iran. He was buried in his home city of Mashhad on Friday.
Reading a statement on state television, the new ayatollah said that vengeance was the "will of the nation".
"We pledge to avenge the blood of the martyred leader and all the martyrs of these two wars from the criminal and disgraced killers," he was quoted as saying.
"The matter depends neither on my personal existence nor on that of other officials. Whether we are present or not, it will come to pass."
Many Iranians taking part in funeral ceremonies over the past few days carried placards calling for the killing of US President Donald Trump, who on Saturday warned that any such plans would see the US "decimate and destroy all areas" of Iran in response.
The Wall Street Journal and other US media reported this week that Israel had shared intelligence with Washington that Iran had recently devised a plan to assassinate the US president.
However, Trump denied that Tehran had made a fresh plan or that Israel was the source of any intelligence. He told the New York Post in an interview that he had been "No. 1 [on Iran's kill list] for a long time".