Tehran, Iran - Donald Trump threatened to hit Iran "hard" after the two foes traded fire for the first time in over a month, while Iran's president warned that more fighting with the US was not in his country's interest.
After six months of war, the foes remain at an impasse, with Iran keeping the strategic Strait of Hormuz closed and the US persisting with a naval counter-blockade of Iran.
Late Sunday, the US said it had carried out strikes on an Iranian island in the Strait of Hormuz, with Tehran quickly retaliating by attacking US military targets in the Middle East.
The exchange raised fears of a return to major hostilities, with the US president vowing to respond.
"We're going to hit them hard," Trump said, according to a Fox News reporter who spoke to him briefly. "There will be a response."
The US said it attacked Iranian rocket launchers on the island of Larak to prevent Tehran from planting mines in the key shipping lane.
Iran responded by with missile and drone attacks aimed at Jordan and the United Arab Emirates, saying they targeted US forces there, but President Masoud Pezeshkian later on Monday called for dialogue.
"We continue to strive for a path of agreement and understanding, and we believe that continuing the war is neither in our interest, nor in the interest of the region," he said at a summit in Kyrgyzstan, adding "the solution to the existing problems is dialogue and cooperation".
State media reported that two people were killed in the US attack on Larak, with several others wounded.
Iran retaliates with attack on US military bases
Iran's powerful Revolutionary Guards, the ideological arm of its military, said the ballistic missile attack on two US air bases in Jordan caused "heavy damage".
Jordan's army said it had intercepted eight missiles, without stating their origin. Trump also told Fox that all the missiles fired at US forces had been shot down, except for one that was determined not to pose a threat.
Iran also said it targeted US personnel at an air base in the UAE and shot down an American drone over Hormuz.
Abu Dhabi said it intercepted a drone over the country's waters, but dismissed claims that Al Minhad Air Base had been targeted as "baseless".
The exchange of fire came after weeks of relative calm, with the Trump administration recently pivoting to "economic warfare".
Earlier on Monday, Trump had called Iran "a Failed Nation", saying on social media that its military was decimated, its finances were crumbling, "and their leadership is in total disarray and incapable of properly representing the country".