Israel bombed more targets in Lebanon on Thursday, putting the US-Iran ceasefire into further jeopardy after the biggest Israeli attacks on its neighbour of the war killed more than 250 people and threatened to torpedo Donald Trump's truce.

In Pakistan, authorities locked down the capital Islamabad in anticipation of the war's first peace talks, cutting off all access to a 3-km (2-mile) zone around the five-star luxury Serena Hotel. Both the US and Iranian delegations are expected to stay at the hotel, which told all guests to check out until Sunday as it had been "requisitioned" for "an important event".

But there was no sign Iran had lifted its blockade of the Strait of Hormuz, which has caused the worst disruption to global energy supplies in history. Tehran said there would be no deal as long as Israel was striking Lebanon.

The spot price that European and Asian refineries pay now for oil rose further to record levels near $150 a barrel, with even higher prices for some products such as jet fuel.

Israel, which invaded Lebanon last month in parallel with the war on Iran to root out the Iran-aligned armed group Hezbollah, says its actions there are not covered by the ceasefire announced late on Tuesday by Trump.

Washington has also said Lebanon is not covered by the truce, but Iran and Pakistan, which acted as mediator, say it was explicitly part of the deal. A host of countries, including Britain and France, said the truce should extend to Lebanon.

A Pakistani source with knowledge of the discussions said Pakistan was working on a ceasefire for Lebanon, as well as for Yemen, another country where Israel has hit Iran-aligned forces: "It will be discussed during the (upcoming) talks and we will settle it."

Israel says it kills Hezbollah chief’s nephew
The Israeli military said on Thursday it had killed the nephew of Hezbollah's Secretary-General Naim Qassem, who had served as his personal secretary, and struck river crossings in southern Lebanon overnight.

Israel struck Beirut's southern suburbs just before midnight and at dawn, and hit towns across the south on Thursday morning, Lebanese state media said.

For its part, Hezbollah, which had initially said it would pause attacks on Israel in line with the ceasefire, said it was resuming them on Thursday morning and had fired once across the border and twice at Israeli forces in southern Lebanon.

Lebanon declared a day of national mourning and shut state offices, while rescuers worked through the night to free the wounded and the dead from under the rubble of buildings blasted apart by Israel without customary warnings to residents to flee.

Outside Beirut's Rafik Hariri University Hospital, a steady stream of ambulances kept arriving throughout Thursday afternoon, driving past the emergency room entrance straight to the forensic department.

"We’re picking up body parts for the most part. It's very rare that we find entire bodies intact," said a rescue worker on condition of anonymity because he was not authorised to speak to the press.

One woman, between tears, told Reuters she had lost her entire family in one of the strikes.

Mourning for Khamenei
Iran's deputy foreign minister Saeed Khatibzadeh told BBC Radio that Israel's strikes on Lebanon were a "grave violation" of the ceasefire.

"It was a catastrophe, could actually end in more catastrophe, and this is the nature of this rogue behaviour that we are seeing from Israel in the whole Middle East."

Inside Iran, where the halt to six weeks of US and Iranian airstrikes has been portrayed as total victory for the clerical rulers, huge crowds turned out to commemorate 40 days of mourning for Supreme Leader Ayatollah Ali Khamenei, killed on the war's first day.

State TV showed crowds in Tehran, Kermanshah, Yazd and Zahedan, with mourners in black carrying Iranian flags and portraits of Khamenei and his son and successor Mojtaba. Large commemorative billboards were displayed and a huge Hezbollah flag hung from one building.

Physical oil prices spike
After six weeks of war, Trump has sought an off-ramp before the economic consequences derail his presidency.

The ceasefire has curbed a surge in energy price benchmarks, which are based on contracts to deliver oil a month in the future. But present-day spot prices paid by refineries around the world are still rising. Though Europe and Asia have been worst hit so far, the US retail price for diesel rose to $5.69 a gallon on Thursday, just 13 cents below the all-time high.

Trump, who announced the truce just before a deadline he had set to destroy Iran's "whole civilisation" unless it unblocked the strait, said on Wednesday he would resume attacks unless Iran complies: "the 'Shootin’ Starts,' bigger, and better, and stronger than anyone has ever seen before".

Though Trump has declared victory, Washington has not achieved the aims he announced at the war's outset: to eliminate Iran's ability to attack its neighbours, destroy its nuclear programme or make it easier for Iranians to topple their government.

Iran still possesses missiles and drones that can hit its neighbours and a stockpile of more than 400 kg (900 pounds) of uranium enriched close to the level for a weapon. Its rulers, who put down a mass uprising just months ago, survived the superpower onslaught with no sign of organised opposition.

And they demonstrated their ability to exert control of the strait despite a massive US military presence in the region.

Iran is pressing for even more US concessions in a final deal, including the total lifting of sanctions that have crippled its economy and acknowledgement of its control over the strait, previously freely open to trade.

Iranian officials say they plan to impose rules on passage, including a potential fee similar to those charged to access man-made canals. Iran's Revolutionary Guards published a map with the strait's main shipping channels marked as unsafe, telling ships instead to sail around islands nearer the Iranian shore.