Hamas’s political chief Ismail Haniyeh has been assassinated in Iran’s capital, Tehran, according to a statement from the group that runs the besieged and bombarded Gaza Strip, which blamed Israel for his killing.

Haniyeh and one of his bodyguards were killed in the early hours of Wednesday after the building where they were staying was struck, the statement said.

“The Islamic Resistance Movement Hamas mourns to our great Palestinian people, to the Arab and Islamic nation, and to all the free people of the world: brother, leader, martyr, Mujahid Ismail Haniyeh, the head of the movement, who was killed in a treacherous Zionist raid on his residence in Tehran,” it added.

Israel has yet to confirm or deny its involvement on the killing of Haniyeh, who was in Tehran to attend the inauguration ceremony of Iran’s President Masoud Pezeshkian on Tuesday. Speaking on Wednesday, Israeli Prime Minister Benjamin Netanyahu said that Israel had delivered crushing blows to Iran’s proxies in recent days, including Hamas and Hezbollah.

Netanyahu did not directly address Haniyeh’s killing, but vowed to “exact a heavy price for any aggression against us from any arena”.

The news of the assassination has sparked anger across Palestine and stoked fears about a wider regional conflict in the wake of Israel’s war on Gaza, now in its 10 month. Lebanon’s Iran-backed Hezbollah and Israel have been exchanging fire over their border while Yemen’s Houthi rebels have been assaulting Israeli-linked ships in the Red Sea and other waters.

At least 39,445 Palestinians have been killed in Israel’s war, now in its 10th month, with more than 91,000 wounded. Israel began attacking Gaza, promising to eliminate Hamas and kill its leaders after the group launched an attack on October 7 in southern Israel that led to the killing of  some 1,139 people and more than 200 being taken captive.  taking more than 200 others captive.

Iran’s Islamic Revolutionary Guard Corps (IRGC) also announced Haniyeh’s death.

“Early this morning, the residence of Ismail Haniyeh in Tehran was struck, resulting in his and one of his bodyguards’ martyrdom. The cause is under investigation and will be announced soon,” the IRGC said in a statement, adding that the attack was under investigation.

According to media reports, the Hamas leader was killed when an “airborne guided projectile” hit a special residence for military veterans in the north of Tehran, at which he was staying, at about 2am (22:30 GMT on Tuesday).

Hamas’s armed wing, the Qassam Brigades, said Haniyeh’s killing takes the war with Israel to a “new levels,” warning of “enormous consequences for the entire region”.

Meanwhile, Iran’s Supreme Leader Ayatollah Ali Khamenei promised “harsh punishment”.

“The criminal and terrorist Zionist regime martyred our dear guest in our house and made us bereaved,” Khamenei said in a statement on Wednesday, adding that “it also prepared the ground for a harsh punishment for itself.”

While Israel has not directly claimed Haniyeh’s killing, at least one far-right official, Heritage Minister Amichai Eliyahu, took to the social media platform X to celebrate.

The killing “makes the world a little better,” he wrote in Hebrew.

Other countries reacted to Haniyeh’s death, with mediators Qatar and Egypt said the attack could derail efforts to reach a ceasefire and prisoner exchange deal.

For its part, the US Secretary of State Antony Blinken said Washington was not aware of or involved in the strike. US officials have maintained there is still a path forward in the ceasefire talks.

Haniyeh left the Gaza Strip in 2019 and lived in Qatar. The top Hamas leader in Gaza is Yahya Sinwar.

Reporting from Deir el-Balah in central Gaza, Al Jazeera’s Hani Mahmoud said the killing was “significant” for the people of Gaza because he was leading negotiations that they hoped would lead to a ceasefire.

“Palestinians across Gaza and the West Bank also view Ismail Haniyeh as a moderate leader who is much more pragmatic compared to other leaders who head the military side of the movement,” Mahmoud said.

“He is very popular here. He grew up in a refugee camp. He represents the vast majority of the people who are the descendants of the refugee families who were displaced from the Palestinian territories in 1948.”

Many worry that Haniyeh’s killing could now lead to a further escalation of the conflict, he added.

Tensions were already high after Israel said it targeted a senior Hezbollah commander in a “precision strike” on Beirut on Tuesday.

“This is a huge escalation – what happened yesterday in Lebanon, what’s happening today in Tehran. It’s an escalation by [Israel] and that’s going to have significant ramifications,” Sami al-Arian, the director of the Center for Islam and Global Affairs at Istanbul Zaim University, told Al Jazeera.