The wave of attacks over the past 24 hours marked the most direct confrontation between Iran and Israel since an April ceasefire, threatening to wreck US efforts to reach an agreement with Iran to end their more than three-month war.
Oil prices pared gains when Iran's military said its first wave of strikes on Israel was over.
The US dollar retreated from its highest level in nearly two months.
A source briefed on the matter told Reuters that Israel had also decided to halt its attacks on Iran.
Pakistani Prime Minister Shehbaz Sharif said on Monday that the final objective in the peace negotiations between Iran and the US is "just about to be achieved," asking all sides in the conflict to exercise restraint.
Israel struck Iranian targets after Iranian forces fired missiles towards Israeli territory late on Sunday.
Iran said its strikes were retaliation for Israeli attacks on strongholds of Iran-backed Hezbollah on the outskirts of Beirut.
Israel hit a petrochemical plant in southwestern Iran that it said was used to produce ballistic missiles.
Iran's Islamic Revolutionary Guard Corps (IRGC) said it retaliated with a strike aimed at a similar Israeli plant in the city of Haifa.
Iran's military headquarters said it had "delivered a painful response" against Israel for its attacks on Lebanon, including Sunday's strikes on the outskirts of Beirut.
"Accordingly, the operations of the armed forces are hereby declared halted; however, it is emphasised that if the aggressions and acts of mischief continue - including in southern Lebanon - much more severe and crushing actions than before will follow."
The exchange has complicated Trump's push to end the war, launched by the US and Israel on February 28, and underscores how easily the conflict could widen into a broader regional confrontation.
A ceasefire announced on April 8 had paused all-out warfare but flare-ups in the Gulf have continued.
In one of several posts on social media, Trump said Israel and Iran both wanted "an immediate CEASEFIRE! Final negotiations on 'Peace' are proceeding, subject to ignorance or stupidity getting in its way".
He added that a US blockade of Iranian ports would remain in place till a final deal was reached.
An Israeli official said Trump had spoken with Prime Minister Benjamin Netanyahu on Monday.
Earlier, an Israeli military official said Israel was prepared to continue operations for "as long as it takes," and confirmed strikes on newly rebuilt Iranian air defence systems in addition to the petrochemical target.
Iranian officials struck a similarly defiant tone.
A military source quoted by the Tasnim news agency said Iran was ready for a prolonged conflict and could renew strikes against US interests in the region.
Iranian foreign ministry spokesman Esmaeil Baghaei said Iran was exchanging messages with the US in an atmosphere of "extreme suspicion".
Israel's actions in Lebanon, whether carried out with US nowledge and consent or not, were aimed at sabotaging diplomacy, he added.
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