Top Iranian commander killed in U.S. airstrike on Trump orders

WASHINGTON (Bloomberg) - A U.S. airstrike in Iraq ordered by President Donald Trump killed one of Iran’s most powerful generals in a provocation that risks escalating a growing conflict with the Islamic Republic.

Qassem Soleimani, who led proxy militias that extended the Islamic Republic’s power across the Middle East, was killed in a strike in Baghdad authorized by Trump, the Defense Department said in a statement late Thursday night.

“At the direction of the president, the U.S. military has taken decisive defensive action to protect U.S. personnel abroad by killing” Soleimani, the department said. “General Soleimani was actively developing plans to attack American diplomats and service members in Iraq and throughout the region.”

The death of Soleimani, who led the Revolutionary Guards’ Quds force, heightened fears that rising tensions between the U.S. and Iran could lead to an armed confrontation that could easily pull in other countries. The pressures, which have been building for months, have been complicated by widespread protests in Iraq and Iran.

U.S. equity futures fell and Asian stocks reversed earlier gains as the news broke, and oil soared. Treasury futures climbed with the yen as investors sought safer haven assets. Futures on the S&P 500 dropped 0.7% as of 10:46 a.m. in Hong Kong on Friday. Brent crude surged 3.3%.

The attack occurred near Baghdad international airport. Details remained unclear, but a person familiar with the developments said an Iraqi militia leader, Abu Mahdi al-Muhandis was also killed.

The Iranian regime will be under “strong pressure” to strike back, said Paul Pillar, a former U.S. Central Intelligence Agency officer and a non-resident senior fellow at Georgetown University in Washington. “Many Iranians will regard this event the same way Americans would regard, say, the assassination of one of the best known and most admired U.S. military leaders. The potential for escalation has suddenly gone up.”

Soleimani, a veteran of the Iran-Iraq war, was a household name in Iran where he’s celebrated for helping to defeat Islamic State in Iraq and Syria and countering U.S. influence.

He had been sanctioned by the U.S. since 2007 and last May Washington designated the Revolutionary Guards Corp in its entirety a foreign terrorist organization, the first time the label has been applied to an official state institution or a country’s security forces.

Earlier in the evening, Iraqi security forces said in a statement that the airport had been struck by rockets.

The assault in Baghdad marked the latest in a series of violent episodes that have strained already hostile relations between Iran and the U.S. that began last week when an American contractor was killed in a rocket attack on an Iraqi military base in Kirkuke, direct American assault on an Iran-backed militia in Iraq. That in turn prompted an attack on the U.S. embassy in Baghdad.

Trump had tweeted a warning of dire consequences for Iranian aggression, with a jaunty twist at the end: “They will pay a very BIG PRICE! This is not a Warning, it is a Threat. Happy New Year!”

The killing of such a prominent member of the Iranian hierarchy was unexpected. The attack was praised by some in Washington on Thursday night, though misgivings were expressed as well.

While Trump had showed restraint in the face of Iranian provocations, “#Iran’s Quds Force chose the path of escalation,” Republican Senator Marco Rubio of Florida said in a tweet. “They are entirely to blame for bringing about the dangerous moment now before us.”

But Senator Chris Murphy, a Connecticut Democrat, said on Twitter that the administration had acted without congressional approval, and asked whether the killing risked “setting off a potential massive regional war.”

A congressional Republican said Soleimani had been responsible for hundreds of American deaths in Iraq and elsewhere. Another said that Iran should be worried about American retaliation rather than the other way around.

Outside the government, the reaction wavered between a sense of justification and apprehension over Soleimani’s killing.

 “If it is true that he has been killed, any effort at negotiations between the U.S. and Iran would be off the table,” said Kamran Bokhari, founding director of the Center for Global Policy in Washington. “This could get ugly.”

Mark Dubowitz, the chief executive of the Washington-based Foundation for Defense of Democracies, said “the regime in Iran is now facing their worst nightmare: a U.S. president willing to escalate using all instruments of national power.”

Earlier Thursday, U.S. Defense Secretary Mark Esper told reporters at the Pentagon that the American military was moving from responding to Iranian-backed attacks to anticipating them.

“There are some indications out there that they may be planning additional attacks. That’s nothing new,” Esper said. “If that happens, then we will act and, by the way, if we get word of an attack of some kind of indication, we would take pre-emptive action as well to protect American forces, American lives. The game has changed.”

The latest violence in Iraq occurred in the wake of the anti-government protests that led to the resignation of Prime Minister Adel Abdul-Mahdi.

Some 500 people have died in clashes between security forces and protesters since Oct. 1, according to Iraq’s independent High Commission for Human Rights. Iraqis, mostly from the Shiite majority population, are protesting against corruption, poor services, and Iran’s sweeping influence in the country.