Iran says it has carried out drone strikes against US military facilities and bases across the Middle East in retaliation for the 13th consecutive night of US strikes on the country.

Explosions were reported along Iran’s Gulf coast and in the western, northern and central areas. Four people were killed and five wounded in an attack in the southwest, Iranian state media said.

Iran later announced attacks on U.S. ally Kuwait as sirens sounded in Bahrain and Jordan, and flights were suspended at a major Iraqi airport after a drone crash.

It comes as Iran condemned the US plan to use frozen Iranian assets to pay for war damages, in a sign of further escalation between the two countries.

On Thursday, US President Donald Trump said damage to ships and cargo in the Strait of Hormuz would be paid for with “Iranian money that the United States owns and controls.”

“These damages may be very substantial but, nevertheless, this is the fair and equitable thing to do,” he posted on his Truth Social platform.

Iranian Foreign Minister Abbas Araghchi responded by saying that seizing another country’s assets to “pay for unrelated future claims is an incendiary precedent.”

“The resulting chaos will not be pretty or peaceful,” he added.

In June, the United States and Iran agreed to a 14-point Memorandum of Understanding (MOU) to halt military operations and reopen the Strait of Hormuz, as well as reach an agreement to end the war within the next 60 days.

But three weeks after it was signed, Trump declared the ceasefire “over” following Iranian attacks on ships in the strait and US strikes in response.

Point 11 of the MoU details that “the United States of America undertakes to make fully available for use the frozen or restricted funds and assets of the Islamic Republic of Iran.”

As the United States attempts to regain control over the Strait of Hormuz, there is growing concern about new threats to shipping in the Red Sea from Yemen’s Iran-backed Houthis.

This has contributed to pushing down the price of crude oil. $100 (£74.96) a barrel, the highest level since May.

Trump separately promised on Thursday “major military punishment” against Iran for the Houthi attacks.

He later told the news website Axios that he was considering restarting major combat operations in Iran and launching attacks “bigger than ever.”

Tensions between the United States and Iran have been rising since early July.

On Thursday night, the US military says it carried out strikes to degrade Iran’s ability to threaten civilian shipping in regional waters.

The US Central Command (Centcom) said it had struck “Iranian military command centers, drone storage facilities, communications networks, coastal surveillance sites and maritime capabilities.”

Iran’s military claimed it had launched attacks on US bases in Kuwait, while Bahrain’s Interior Ministry reported its air sirens had sounded and Iranian state media also said alarms had been raised in Jordan.

News agencies AFP and Reuters reported a drone crash at Erbil International Airport in Iraq, causing a temporary shutdown. Flights have since resumed.