By Alexander Cornwell, Parisa Hafezi and Jeff Mason TEL AVIV/DUBAI/WASHINGTON (Reuters) -Iranian missiles struck Israel's Tel Aviv and the port city of Haifa before dawn on Monday, destroying homes and fuelling concerns among world leaders at this week's G7 meeting that the battle between the two old enemies could lead to a broader regional conflict.

Iranian missiles struck Israel’s Tel Aviv and the port city of Haifa before dawn on Monday, destroying homes and fuelling concerns among world leaders at this week’s G7 meeting that

Iranian missiles damaged the US embassy in Tel Aviv, escalating tensions. Israel retaliated with strikes on Iran's energy sector, while both sides continued attacks.

At least three people were killed and scores were wounded during an aerial battle over Tel Aviv, as Iranian missiles rained down and Israeli rockets attempted to intercept them.

Onlookers gathered on Saturday at a central Tel Aviv residential building next door to Israel’s defense headquarters that was damaged after it took a hit from what appeared to be shrapnel from an overnight missile barrage from Iran.

"Another barrage of dozens of rockets was launched" towards Israel, the statement adds. The IDF says that the explosions people are hearing "originate from interceptions or impacts". We've been hearing from Iran's Supreme Leader Ali Khamenei who says Iran “will inflict heavy blows” after Israel “launched war”.