(Adds source suggesting no U.S. casualties, updates market reaction)
* At least a dozen missiles targeting U.S. forces in Iraq
* Trump to make statement on Wednesday
* U.S. FAA bans flights in airspace above Iraq, Iran and Gulf
* At least 56 dead in stampede ahead of Soleimani funeral Tuesday
BAGHDAD/WASHINGTON, Jan 8 (Reuters) - Iran launched a missile attack on U.S.-led forces in Iraq in the early hours of Wednesday in retaliation for the U.S. drone strike on an Iranian commander whose killing has raised fears of a wider war in the Middle East.
Iran fired more than a dozen ballistic missiles from its territory against at least two Iraqi facilities hosting U.S.-led coalition personnel at about 1:30 a.m. (2230 GMT), the U.S. military said.
U.S. President Donald Trump said in a tweet late on Tuesday that an assessment of casualties and damage from the strikes was under way and that he would make a statement on Wednesday morning.
“All is well!” Trump, who visited the al-Asad air base in December 2018, said in the Twitter post.
One source said early indications were of no U.S. casualties. Other U.S. officials declined to comment.
Iran’s Islamic Revolutionary Guards Corps confirmed they fired the missiles in retaliation for last week’s killing of Qassem Soleimani, according to a statement on state TV.
The force advised the United States to withdraw its troops from the region to prevent more deaths and warned U.S. allies including Israel not to allow attacks from their territories.
Pentagon spokesman Jonathan Hoffman said in a statement that the bases targeted were al-Asad air base and another facility in Erbil, Iraq.
“As we evaluate the situation and our response, we will take all necessary measures to protect and defend U.S. personnel, partners, and allies in the region.”
Hours earlier on Tuesday, U.S. Defense Secretary Mark Esper said the United States should anticipate retaliation from Iran over Friday’s killing in Iraq of Soleimani, commander of the elite Quds Force.
“I think we should expect that they will retaliate in some way, shape or form,” he told a news briefing at the Pentagon, adding that such retaliation could be through Iran-backed proxy groups outside of Iran or “by their own hand.”
Iranian Foreign Minister Mohammad Javad Zarif said Iran “took & concluded proportionate measures in self-defense under Article 51 of the U.N. Charter”, targeting the bases where the attack against its citizens and senior officials was launched.
“We do not seek escalation or war, but will defend ourselves against any aggression,” he wrote in a post on Twitter.
If the U.S. military was indeed spared casualties, and Iran has completed its threatened retaliation for the U.S. drone strike on Soleimani, as Zarif suggested, there might be an opportunity for Washington and Tehran to seek an off-ramp to their increasingly violent confrontation.
Asian stock markets, which had been roiled by the attack, pared some of their losses after the tweets from Trump and Zarif. U.S. crude prices also retreated after surging almost 5% on worries any conflict could cut oil supplies.
‘WE WILL TAKE REVENGE’
The U.S. Federal Aviation Administration said it would ban U.S. carriers from operating in the airspace over Iraq, Iran, the Gulf and the Gulf of Oman. Singapore Airlines had already diverted all flight routes from Iranian airspace.
Democrats in the U.S. Congress and some of the party’s presidential contenders warned about the escalating conflict.
“Closely monitoring the situation following bombings targeting U.S. troops in Iraq,” U.S. House of Representatives Speaker Nancy Pelosi said on Twitter. “We must ensure the safety of our service members, including ending needless provocations from the Administration and demanding that Iran cease its violence. America & world cannot afford war.”
Soleimani, a pivotal figure in orchestrating Iran’s long-standing campaign to drive U.S. forces out of Iraq, was also responsible for building up Tehran’s network of proxy armies across the Middle East.
He was a national hero to many Iranians but viewed as a dangerous villain by Western governments opposed to Iran’s arc of influence running across the Levant and into the Gulf region.
A senior Iranian official said on Tuesday that Tehran was considering several scenarios to avenge Soleimani’s death. Other senior figures have said the Islamic Republic would match the scale of the killing when it responds, but that it would choose the time and place.
“We will take revenge, a hard and definitive revenge,” the head of Iran’s Revolutionary Guards, General Hossein Salami, told throngs who crowded the streets for Soleimani’s funeral on Tuesday in Kerman, his hometown in southeastern Iran.
Soleimani’s burial went ahead after several hours of delay following a stampede that killed at least 56 people and injured more than 210, according to Iran’s semi-official Fars news agency.
Iran TV reported Soleimani was buried after the missile attacks. “His revenge was taken and now he can rest in peace,” it said.
The missiles were launched on Wednesday at the same time that he was killed last on Friday.
Soleimani’s body had been taken to holy Shi’ite Muslim cities in Iraq and Iran, as well as the Iranian capital, Tehran, before arriving to be buried in the city cemetery’s “martyrs section”, according to the semi-official news agency ISNA.
In each place, huge numbers of people filled thoroughfares, chanting: “Death to America” and weeping with emotion. Supreme Leader Ayatollah Ali Khamenei wept as he led prayers in Tehran.
Prompted by the strong public backlash over Soleimani’s killing on Iraqi soil, lawmakers in Iraq voted on Sunday to demand a removal of all foreign forces from the country.
More than 5,000 U.S. troops remain in Iraq along with other foreign forces as part of a coalition that has trained and backed up Iraqi security forces against the threat of Islamic State militants.
Some 115 German soldiers are stationed in Erbil and all are fine, a spokesman for Bundeswehr operations said.
A NATO official told Reuters it would move some of its several hundred trainers out of Iraq. Canada said on Tuesday some of its 500 Iraq-based forces would be temporarily moved to Kuwait for safety reasons.
U.S. officials have said Soleimani was killed because of solid intelligence indicating forces under his command planned attacks on U.S. targets in the region, although they have provided no evidence.
Ali Shamkhani, secretary of Iran’s Supreme National Security Council, said 13 “revenge scenarios” were being considered, Fars news agency reported. Even the weakest option would prove “a historic nightmare for the Americans”, he said.
Reporting by Ahmed Aboulenein in Baghdad, Parisa Hafezi and Babak Dehghanpisheh in Dubai, Phil Stewart, Steve Holland and Eric Beech in Washington, Michelle Nichols at the United Nations, Steve Scherer in Ottawa and Robin Emmott in Brussels; Writing by Sonya Hepinstall and Lincoln Feast; Editing by Peter Cooney, Robert Birsel
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