(Bloomberg) -- Iran said blasts that killed almost 100 people in a central province were likely carried out by suicide bombers, after the attack stoked concerns of broadening conflict in the Middle East.

The first blast in Kerman on Wednesday, which targeted a crowd marking the anniversary of the death of Qassem Soleimani, was a suicide bomber, state-run Islamic Republic News Agency reported citing a person it didn’t identify. The second was also likely a suicide attack, it said.

Soleimani was one of Iran’s most powerful generals killed by the US in a 2020 drone strike. Tehran said at least 84 people were dead and 220 others wounded. 

Only hours after the blasts — the Islamic Republic’s deadliest since its founding in 1979 — more than a dozen countries led by the US increased their pressure on Tehran. They issued a warning against Houthi militants, an Iranian proxy force in Yemen, against continuing their attacks on shipping in the Red Sea, which have disrupted global commerce and triggered a build up of Western naval power in the area.

The countries, including the UK, Australia and Germany, pledged to “hold malign actors accountable” if attacks on vessels continued. The series of events highlight the risk of a wider war in the Middle East since the Israel-Hamas war erupted but many analysts still view a direct US-Iran confrontation as a remote possibility.

Most observers instead predict a growing number of tit-for-tat proxy attacks. On Thursday, a drone attack in Iraq killed at least two commanders of an Iranian-backed militia, with the Iraqi government blaming the US-led international forces in the country for the incident.

“The Israeli national security imperative is clear and its top political and military officials are intent on eliminating Hamas leadership across the world,” Ayham Kamel, director of Middle East and North Africa research at the Eurasia Group said in a research note this week. While retaliation against Israel is likely, according to the note, “the chances of a large-scale regional confrontation remain unchanged at 25%.”

The risk remains that a smaller incident could suddenly spill into something larger with a growing military buildup in the region. 

Those fears helped push up oil prices by as much as 1.5% in London further on Thursday after the previous session’s 3% increase. The region produces about a third of the world’s crude and ships carrying everything from food to fuel traverse the waterways that have already been threatened by Houthi fighters over the past two months. 

The situation is likely to bring back a conflict premium for oil prices, which until recent days had mostly been falling on concerns about oversupply.

Another explosion in Baghdad from a drone attack on a security headquarters belonging to an Iranian-backed militia killed two of the group’s commanders on Thursday, Iraq’s Al-Sumaria TV reported. The attack was blamed on US-led coalition forces in the country and is a “dangerous escalation and assault,” Yahya Rasool Abdullah, spokesman for the Commander-in-Chief of the Iraqi Armed Forces said in a statement. Reuters said at least four members of the Iran-backed group died in the blast. 

Groups backed by Iran have escalated attacks across Iraq, Syria, Lebanon and Yemen since Israel struck back against Hamas, the Gaza-based group designated as a terrorist organization by the US and European Union. Hamas infiltrated Israel on Oct. 7, killed some 1,200 people and kidnapped another 240. More than 100 hostages remain in Gaza. Hamas-run authorities there say Israel’s retaliatory strikes have killed some 22,000 people.

People familiar with the matter have said the US and its allies are considering possible military strikes against the Houthis in Yemen, in a recognition that a maritime task force launched by Washington may not be enough to eliminate the threat to the vital waterway that normally handles about 12% of the world’s commerce.

The sea attacks and war on Hamas will be top of the agenda when US Secretary of State Antony Blinken heads to the Middle East this week. 

The strike near Soleimani’s grave was especially sensitive because his assassination four years ago also led to fears of a direct military confrontation between Iran and the US, and in the aftermath Tehran mistakenly shot down a passenger plane. Iran continues to vow to avenge his death.

Iran will respond with “fire & fury to the orchestrators, perpetrators, & anyone who’s aided & abetted in this terrorist attack,” its mission to the United Nations said in a statement on X.

Iran had said the blasts were aimed at punishing its stance against Israel’s invasion of Gaza.

However, the ability of Iran to respond either directly or through its regional proxies may be limited given many of them have already been involved in launching attacks against Israel, Hasan Alhasan, Senior Fellow for Middle East Policy at the International Institute for Strategic Studies said.

“Iran’s ability to counter-escalate indirectly through its armed non-state partners or by targeting Israel’s commercial interests at sea is already stretched,” he said. “Iran could instead choose to saber rattle instead by unveiling new developments linked to its nuclear or missiles programs.”

Although Iran cited its opposition to Israel as the motive for the cemetary attack, Washington said it had no reason to believe Israel was involved and said any suggestion of the US taking part was “ridiculous.” The initial US supposition was that Islamic State or a related militant group was responsible, according to two people familiar with the US government’s analysis. Israel’s foreign ministry said it had no comment on the blasts. 

The explosion appears to be the deadliest attack of its kind in Iran since the 1979 revolution. The country has suffered multiple public stabbing and gun attacks since 2018, which have usually been blamed on Sunni Muslim militants including Islamic State, but not previously on this scale.

Wednesday’s strike came less than 24 hours after an explosion blamed on Israel killed a senior Hamas leader in Lebanon’s capital Beirut, in another potential flashpoint for regional spillover. Iran-backed Hezbollah has launched attacks against Israel from its bases in Lebanon since the war began. 

--With assistance from Courtney McBride.

(Updates with attribution of blasts in lead and second paragraph. An earlier version of this story was corrected for a spelling error in the headline.)

©2024 Bloomberg L.P.