By Maya Gebeily, Humeyra Pamuk and Pesha Magid
BEIRUT/WASHINGTON/JERUSALEM, March 7 (Reuters) - The expanding war in Iran entered its second week on Saturday amid renewed uncertainty about how or when hostilities will end, as U.S. President Donald Trump declared he would only accept Tehran's "unconditional surrender" and Israel traded fresh attacks with Iran and Lebanon.
Trump's comments on social media on Friday came hours after Iran's president announced that unnamed countries had begun mediation
efforts, briefly raising the possibility, however faint, of a diplomatic resolution a week after the U.S. and Israel launched strikes on Iran.
"There will be no deal with Iran except UNCONDITIONAL SURRENDER!" Trump wrote. "After that, and the selection of a GREAT & ACCEPTABLE Leader(s), we, and many of our wonderful and very brave allies and partners, will work tirelessly to bring Iran back from the brink of destruction, making it economically bigger, better, and stronger than ever before."
Trump has offered shifting explanations of his war aims, raising the possibility of an extended regional conflict that has already spilled well beyond Iran's borders, shaken global financial markets and sent oil prices soaring.
In response to the attack, Iran has targeted Israel as well as multiple Gulf states that host U.S. military installations.
Inside Israel on Friday, explosions could be heard as Israeli defenses activated to shoot down incoming Iranian fire. The UAE, Kuwait, Qatar, Bahrain and Saudi Arabia all reported fresh drone and missile attacks.
Meanwhile, Israel pursued a major expansion of the war in Lebanon, pounding the capital Beirut on Friday after ordering an unprecedented evacuation of the city's entire southern suburbs.
Israel also launched a new wave of attacks on Iran, saying 50 of its warplanes had hit a bunker still being used by Iran's leadership beneath slain Supreme Leader Ayatollah Ali Khamenei's destroyed Tehran compound.
Early on Saturday, Iran's semi-official Tasnim news agency reported that Mehrabad Airport in Tehran had been struck.
There was no immediate comment from Iran's Revolutionary Guard or Hezbollah.
Israel has extended its bombing to Lebanon to root out Hezbollah, the Shi'ite militia allied to Iran that has been a dominant faction in Lebanese politics since the 1980s. Hezbollah fired on Israel this week to avenge the death of Khamenei.
"We're sleeping here in the streets - some in cars, some on the street, some on the beach," said Jamal Seifeddin, 43, who fled Beirut's southern suburbs and spent the night on the streets in the downtown district.
About 300,000 people have been displaced in Lebanon in the past four days, according to the Norwegian Refugee Council.
The Israeli military says it has destroyed 80% of Iran's air-defense systems in the first week of the campaign and disabled more than 60% of its missile launchers.
MARKETS SWOON
Trump's demand for Iran's surrender, and the likelihood that it would complicate any quick path to ending the conflict, sent European and U.S. stock indexes tumbling on Friday. Oil prices hit their highest prices in years with the critical shipping lane of the Strait of Hormuz effectively closed down.
Trump told Reuters in a telephone interview on Thursday that he must have a say in selecting Iran's new supreme leader to replace Khamenei, killed on the war's first day, a demand he repeated on Friday in a remarkable assertion of power over the country of more than 90 million people.
Iran's U.N. ambassador, Amir Saeid Iravani, told reporters that new leadership would be chosen "in accordance with our constitutional procedures and solely by the will of the Iranian people - without any foreign interference."
Israel has said openly that it aims to overthrow Iran's ruling system. It has been bombing parts of western Iran to support Iranian Kurdish militias who hope to exploit the war to seize towns near the frontier, according to three sources familiar with Israel's talks with the factions.
Iran has cast the war as an unprovoked attack and describes the killing of Khamenei as an assassination.
HUNDREDS KILLED SO FAR
Earlier on Friday, Iran President Masoud Pezeshkian posted on social media: "Some countries have begun mediation efforts." He did not identify the countries or provide further details.
Russia is providing Iran with locations of U.S. warships and aircraft in the Middle East after Iran's ability to locate U.S. forces was degraded, the Washington Post reported, citing three officials familiar with the intelligence.
Russian missions in the U.S. did not immediately respond to requests for comment on the report.
Trump met with executives from seven defense contractors on Friday, who he later said had agreed to accelerate weapons production. The administration has been pressuring contractors as Iran and other recent operations have drawn down supplies.
Karoline Leavitt, a White House spokeswoman, said the U.S. has enough weapons stockpiles to meet the needs of its Iran operations, which she said would take about four to six weeks to complete.
At least 1,332 people have been killed in Iran since the U.S. and Israel launched strikes on February 28, Iravani said, citing the Iranian Red Crescent Society.
The Lebanese health ministry has reported 123 people killed and 683 wounded as a result of Israeli attacks. Iranian attacks have killed 11 people in Israel since the war started, and at least six U.S. service members have been killed.
Two U.S. officials told Reuters that military investigators believed it was likely that U.S. forces were responsible for an apparent strike on an Iranian girls' school that killed scores of children on the first day of the war. The investigators have not yet reached a final conclusion.
(Reporting by Maya Gebeily in Beirut, Humeyra Pamuk in Washington, Pesha Magid in Jerusalem and Reuters bureaux; Writing by Jonathan Allen and Joseph Ax; Editing by Himani Sarkar)
