The prospect of tit-for-tat strikes on civilian infrastructure could further rattle global markets when they reopen on Monday morning, and threaten the livelihoods of millions of civilians in the region who rely almost exclusively in some cases on desalination plants for water.
Air raid sirens sounded across Israel in the early hours of Sunday, warning of incoming missiles from Iran, after 180 people were hurt overnight in two separate attacks in the southern Israeli towns of Arad and Dimona, near Israel's secretive nuclear reactor.
The Israeli military said hours later that it was striking Tehran in response.
Trump issued his warning on Saturday evening, less than a day after signalling the US might be considering winding down the conflict, even as US Marines and heavy landing craft are heading to the region.
"If Iran's fuel and energy infrastructure is attacked by the enemy, all energy infrastructure, as well as information technology ... and water desalination facilities, belonging to the US and the regime in the region will be targeted pursuant to previous warnings," Iranian military spokesman Ebrahim Zolfaqari said, according to state media.
But while attacks on electricity could hurt Iran, they would be potentially catastrophic for its Gulf neighbours, which consume around five times as much power per capita.
Electricity makes their gleaming desert cities habitable, in part by powering the desalination plants that produce 100 per cent of the water consumed in Bahrain and Qatar.
Such plants use seawater to meet more than 80 per cent of drinking water needs in the United Arab Emirates, and 50 per cent of the water supply in Saudi Arabia.
Iran's Parliament Speaker Mohammad Baqer Qalibaf doubled down, writing on X that critical infrastructure and energy facilities in the Middle East could be "irreversibly destroyed" should Iranian power plants be attacked.
Iran's powerful Revolutionary Guards said they would also mean the shipping lane where a fifth of global oil and liquefied natural gas normally transits along Iran's southern coast would remain shut.
"The Strait of Hormuz will be completely closed and will not be opened until our destroyed power plants are rebuilt," the Guards said in a statement.
More than 2000 people have been killed during the war the US and Israel launched on February 28, which has upended markets, spiked fuel costs, fuelled global inflation fears and convulsed the postwar Western alliance.
Markets already under severe strain from blockaded shipping were further rattled last week when Israel attacked a major gas field in Iran, and Tehran responded with strikes on neighbours Saudi Arabia, Qatar and Kuwait, raising the prospect of damage hindering energy output even if tankers resume sailing.
Iranian attacks have effectively closed the Strait of Hormuz, causing the worst oil crisis since the 1970s. Its near-closure sent European gas prices surging as much as 35 per cent last week.
"If Iran doesn't FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz, within 48 HOURS from this exact point in time, the United States of America will hit and obliterate their various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!" Trump posted on social media around on Saturday night.
Iranian media quoted the country's representative to the International Maritime Organisation as saying the strait remains open to all shipping except vessels linked to "Iran's enemies".
The US and Israel say they have seriously degraded Iran's ability to project force beyond its borders with their three weeks of intensive air strikes.
But Tehran fired its first known long-range ballistic missiles with a range of 4000km on Friday towards a US-British Indian Ocean military base, expanding the risk of attacks beyond the Middle East.
The war has been taking place alongside a confrontation on a separate front between Israel and Lebanon's Hezbollah, backed by Iran, with Israel saying on Sunday its troops had raided a number of the armed group's sites in southern Lebanon.
Israeli military spokesperson Brigadier General Effie Defrin told reporters Israel continues to hit Iran nonstop and expects "weeks more of fighting against Iran and Hezbollah".
Hezbollah said it had attacked several border areas in northern Israel.
Hezbollah has fired hundreds of rockets at Israel since it entered the regional war on March 2, prompting an Israeli offensive that has killed more than 1000 people in Lebanon.
Israel said it had instructed the military to accelerate the demolition of Lebanese homes in "frontline villages" to end threats to Israelis, and to destroy all bridges over Lebanon's Litani River which it said were used for "terrorist activity".
