Tehran called off nuclear talks that Washington had said were the only way to halt Israel's bombing, while Israeli Prime Minister Benjamin Netanyahu said the attacks were nothing compared with what Iran would see in the coming days.
Israel's military said on Saturday more missiles were launched from Iran towards Israel, and it was working to intercept them. It also said it was attacking military targets in Tehran. Iranian state television said Iran had launched missiles and drones at Israel.
Several projectiles were visible in the night sky over Jerusalem late on Saturday. Air raid sirens did not sound in the city, but were heard in the northern Israeli city of Haifa.
Israel's ambulance service said 14 people were injured, including one critically, at a two-storey house in northern Israel following an Iranian missile strike. Israeli media reported that one person had been killed in the strike.
Israel's gas field strike came a day after it wiped out the top echelon of Iran's military command in a surprise attack.
Netanyahu said Israel's strikes had set back Iran's nuclear program possibly by years and rejected international calls for restraint.
"We will hit every site and every target of the Ayatollahs' regime, and what they have felt so far is nothing compared with what they will be handed in the coming days," he said in a video message.
In Tehran, Iranian authorities said around 60 people, including 29 children, were killed in an attack on a housing complex, with more strikes reported across the country. Israel said it had attacked more than 150 targets.
Iran had launched its own retaliatory missile volley on Friday night, killing at least three people in Israel. Air raid sirens sent Israelis into shelters as waves of missiles streaked across the sky and interceptors rose to meet them.
US President Donald Trump has lauded Israel's strikes and warned Iran of much worse to come. He said it was not too late to halt the Israeli campaign, but only if Tehran quickly accepted a sharp downgrading of its nuclear program at talks with Washington that were due to be held on Sunday.
But host Oman confirmed on Saturday that the next round of talks had been scrapped. Iranian Foreign Minister Abbas Araqchi said holding talks was unjustifiable while Israel's "barbarous" attacks were ongoing.
In the first apparent attack to hit Iran's energy infrastructure, Iranian media reported a fire after Israel bombed the South Pars gas field in southern Bushehr province.
With Israel saying its operation could last weeks, and urging Iran's people to rise up against their Islamic clerical rulers, fears have grown of a regional conflagration dragging in outside powers.
"If (Supreme Leader Ayatollah Ali) Khamenei continues to fire missiles at the Israeli home front, Tehran will burn," Israeli Defence Minister Israel Katz said.
Tehran warned Israel's allies that their military bases in the region would come under fire too if they helped shoot down Iranian missiles.
However, 20 months of war in Gaza and a conflict in Lebanon last year have decimated Tehran's strongest regional proxies, Hamas in Gaza and Hezbollah in Lebanon, reducing its options for retaliation.
Iran's overnight fusillade included hundreds of ballistic missiles and drones, an Israeli official said. Three people were killed and dozens wounded, the ambulance service said.
In Iran, Israel's two days of strikes destroyed residential apartment buildings, killing families and neighbours as apparent collateral damage in strikes targeting scientists and senior officials in their beds.
Iran said 78 people had been killed on the first day and scores more on the second day, including 60 when a missile brought down a 14-storey apartment block in Tehran, where 29 of the dead were children.
Israel sees Iran's nuclear program as a threat to its existence, and said the bombardment was designed to avert the last steps to production of a nuclear weapon.
