(Bloomberg) — Hamas said Israel killed its political leader, Ismail Haniyeh, in an airstrike on Iran’s capital, putting the Middle East even further on edge.

Iran’s supreme leader said he had a “duty to seek vengeance” and that Israel should prepare for “severe punishment.”

Haniyeh, a chief negotiator for Hamas who’s based in Qatar, was in Tehran for the inauguration of Iran’s new president on Tuesday. He was killed “in a treacherous Zionist airstrike on his residence” in the city overnight, Hamas said in a statement early Wednesday. Iranian media said his bodyguard also died.

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Oil prices jumped, with Brent crude climbing 2.4% to just above $80 a barrel as of 10:05 a.m. in London, though it’s still down since Friday. Gold also rose. The shekel weakened to head for its worst week since the start of Israel’s war with Hamas in October.

The Israeli government and military are yet to comment.

Haniyeh’s death came just after an Israeli strike on Lebanon’s capital of Beirut late Tuesday aiming at a senior Hezbollah commander. That attack, which Israel says killed the commander, Fuad Shukr, was a response to a deadly rocket assault in the Israeli-controlled Golan Heights over the weekend.

The strike on Haniyeh will be seen as a major coup by Israeli Prime Minister Benjamin Netanyahu and his coalition, which vowed to eliminate Hamas leaders after the group’s Oct. 7 attack.

Yet the move will inflame tensions with Iran and is hugely embarrassing for the Islamic Republic. It presents Supreme Leader Ayatollah Ali Khamenei and President Masoud Pezeshkian with the stern challenge of how to respond.

The attack follows direct exchanges of fire between Tehran and Israel in April. Back then, the two sides responded to one another in a calibrated way to avoid triggering a regional war. Iran effectively gave warning before firing a barrage of missiles and drones at Israel, almost of which were intercepted with the help of the US, UK, France and Jordan. Israel opted for a low-level strike on an Iranian airbase in response.

Since Pezeshkian’s election victory earlier this month, he and Khamenei have suggested they want to improve ties with the West to get sanctions eased.

The latest attack in the heart of Tehran came hours after Pezeshkian met Haniyeh at a ceremony attended by ministers and officials from China, Turkey, Saudi Arabia, Egypt and South Africa.

China and Qatar were among the nations to condemn what they both called an “assassination.” Beijing warned it would cause more turbulence in the Middle East.

There’ll be “significant repercussions in the entire region,” Hamas’s military wing said in a statement. “The enemy has miscalculated by expanding its aggression.”

The Houthis, another Iran-backed group in Yemen who killed a person with a drone fired on Tel Aviv this month, said they’d continue to stand by Hamas.

Haniyeh, in his early 60s, was key to the ongoing cease-fire talks between Israel and Hamas — relaying messages to and from the militant group’s leaders in Gaza — and his death has the potential to scupper them. The US has said in the past week that a deal’s getting closer, even if there’s still plenty to resolve.

Netanyahu has argued that Israel’s military pressure on Hamas in Gaza is forcing the group to yield on some points.

The two sides are negotiating a US-based plan that would lead to a cease-fire and the release of roughly 100 hostages still held by Hamas in Gaza. The US is keen for any truce to be permanent and lead to the reconstruction of Gaza, much of which has been reduced to rubble. Israel insists that any deal must not stop it being able to resume fighting and destroy Hamas.

Thousands of fighters from Hamas, designated a terrorist group by the US and European Union, swarmed into southern Israel on Oct. 7, killing 1,200 people and taking 250 hostage. Israel’s subsequent offensive on Gaza has killed almost 40,000 people, according to the Hamas-run health ministry in the Palestinian territory.

The war has roiled the Middle East, leading to fierce conflict or exchanges of fire between Israel and Iran’s ‘Axis of Resistance,’ groups of anti-Western militias. They include Hamas, Hezbollah and the Houthis.

Haniyeh was born in 1962 in Gaza. In 2006, when Hamas won parliamentary elections, he headed a short-lived Palestinian government, boycotted by most of the world because of its refusal to renounce violence against Israel.

A year later, in 2007, Hamas took full control of the Gaza Strip after a brief civil war with the more moderate Fatah party. Israel and Egypt have imposed a blockade on Gaza since then.

Haniyeh left Gaza in 2019 and mostly lived in Doha, Qatar’s capital, in recent years. Qatar, along with Egypt and the US, is a key mediator between Hamas and Israel.

In April, Israel killed three of Haniyeh’s children in an airstrike in Gaza.

–With assistance from Arsalan Shahla, Eltaf Najafizada, Dan Williams, Yasufumi Saito and Kateryna Kadabashy.

(Updates throughout.)

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