Mojtaba Khamenei, the powerful son of Iran’s slain Supreme Leader Ali Khamenei, is alive and favoured to emerge as his father's successor, two Iranian sources told Reuters on Wednesday.

As new explosions rang out in Tehran, ​plans were in doubt for a funeral for the elder Khamenei, 86, killed by Israeli forces on Saturday in the first assassination of a nation's top ruler by airstrike. The body had been expected ‌to lie in state in a vast Tehran mosque from Wednesday evening, but state media reported a farewell ceremony had been postponed.

The United States and Israel pressed on with their round-the-clock assaults on Iran on Wednesday in a campaign that the top US commander said was “ahead of the game plan”.

A fall in global markets turned into a rout in Asia, including a record-breaking crash in Seoul, as some investors were unconvinced by US President Donald Trump’s assurances he would quickly reopen the world’s most important shipping corridor and release blockaded Middle East oil and gas. But European markets stabilised and ​turned higher after two days of sharp losses, on hopes that the war might end soon.

The two Iranian sources, speaking on condition of anonymity, said Mojtaba, 56, was not in Tehran during the strike that destroyed the leader's ​compound and also killed the elder Khamenei’s wife, another son and a number of senior military and leadership figures.

Iran said the Assembly of Experts, which will select the new leader, will ⁠announce its decision soon, only the second time it has done so since the Islamic Republic’s founding in 1979.

“The Supreme Leader will be identified at the closest opportunity. We are close to a conclusion. However, the situation in the country is ​a war situation,” Assembly member Ayatollah Ahmad Khatami told state TV. He said the candidates had already been identified, but did not name them.

Israel said it would hunt down whoever was chosen.

“Every leader appointed by the Iranian terror regime to continue and lead ​the plan to destroy Israel, to threaten the United States and the free world and the countries of the region, and to suppress the Iranian people — will be an unequivocal target for elimination,” Defence Minister Israel Katz said in a statement. “It does not matter what his name is or the place where he hides.”

Israel said its forces hit targets across Iran for a fifth day. An Israeli F-35 fighter jet shot down an Iranian Yak-130 over Tehran, believed to be the first time the new generation F-35 has downed a manned aircraft in combat.

Mojtaba Khamenei seen as Clear Favourite

Other candidates for supreme leader include Hassan Khomeini, grandson of the Islamic Republic’s founder and a champion of the reformist faction that has been sidelined in recent decades.

But the clear favourite appears to be Mojtaba Khamenei, who amassed power under his ​father as a senior figure in the security forces and the vast business empire they control. Choosing him would send a signal that hardliners were still firmly in charge.

Some Iranians have openly celebrated the death of the supreme leader, whose security forces killed thousands of ‌anti-government demonstrators only ⁠weeks ago in the biggest domestic unrest since the era of the revolution.

But Iranians angry with the government said it was unlikely to be much sign of protest while bombs are falling.

“We have nowhere to go to protect ourselves from strikes; how can we protest?” Farah, 45, said by phone from Tehran.

The Revolutionary Guards and basiji militia “are everywhere. They will kill us. I hate this regime, but first I have to think about the safety of my two children,” he said.

Despite initial US hope for a swift and decisive ouster of Tehran’s clerical leadership, Iran kept up strikes in response against Israel and Arab Gulf states that host US bases.

‘Shotting what can shoot us’

“My overall operational assessment is that we are ahead of our game plan,” he said. “In simple terms, we’re focused on shooting things that can shoot us.”

The campaign has also expanded to Lebanon, where Israel has bombed Beirut and vowed to uproot the Iran-backed group Hezbollah after it launched strikes into Israel.

The Israeli military said on Wednesday ​its ground forces were advancing in southern Lebanon and ordered residents to evacuate the entire swathe of territory south of the Litani River.

In Israel, air-raid sirens sounded warnings, and buildings ​shook as Iranian missiles were intercepted.

Oil prices ⁠climbed higher on Wednesday as Tehran attacked ships and energy facilities, closing navigation through the Strait of Hormuz, where a fifth of the world’s oil and liquefied natural gas are shipped close to its coast.

Scores of ships have halted in the Gulf. Qatar, one of the world’s main LNG producers, has shut production. Iraq has scaled back oil output.

The Strait is under the “full control” of Iran’s navy, the Revolutionary Guards said on Wednesday, warning vessels not to transit the waterway, the semi-official Fars news agency said.

Trump said the US Navy ⁠could begin escorting oil tankers ​through the Strait if necessary. But shipowners and analysts are uncertain whether that would be enough to stop rising prices or whether the US can ​spare vessels to do so without exposing them to potential attacks.

Trump risks political fallout if higher energy prices persist, as his Republican Party tries to retain power in the congressional midterm elections in November.