Anti-Trump billboards hanging in Tehran on Monday depicted the US President in a coffin or below text reading 'Hey terrorist! Get ready to die' as Iran and the United States widen attacks on each other.

Iran's Revolutionary Guards said on Monday they had struck US military assets across the West Asia after another night of US bombardment of Iranian cities, part of a cycle of attacks that has all but wrecked an interim ceasefire agreement.

Oil prices briefly jumped above $90 a barrel after renewed disruption to shipping through the Strait of Hormuz, but later pared gains after Iran's Foreign Ministry said mediators had recently presented proposals to Tehran, signalling that diplomatic contacts remain active.

Trump, under mounting political pressure at home over rising gasoline prices, defended the latest strikes on Iran as retaliation for the deaths of as many as three American service members in recent Iranian attacks.

The conflict has also escalated with attacks on desalination facilities, raising the prospect of water shortages across parts of the Gulf and opening a new front in a war that is increasingly threatening civilian infrastructure. Bahrain's Civil Aviation Authority said on Monday that Iran had targeted the kingdom's civil air navigation systems, but that operations and air traffic were proceeding normally.