(Bloomberg) — Iran is assessing 13 scenarios to respond to the U.S. killing of a powerful Iranian general, and even the weakest of those options would be a “historic nightmare” for the U.S., the head of Iran’s national security council said on Tuesday.

The menacing comments ended an upbeat mood for markets, paring earlier gains in U.S. equity futures and reversing declines in gold and Treasuries. Earlier, stocks had posted strong gains across Asia amid a general easing of concern about the situation in the Middle East following the killing of General Qassem Soleimani in an American drone strike last week.

“Even if the weakest of these scenarios gains a consensus, the implementation of it can be a historic nightmare for the Americans,” Ali Shamkhani was cited as saying by Iran’s semi-official Fars news agency. “For now, for intelligence reasons, we cannot provide more information to the media.” Iranian officials have previously said that U.S. forces in the region will be targets, and the Iranian parliament on Tuesday designated the Pentagon and affiliated companies as terrorists.

Soleimani’s exploits in conflicts from Syria to Yemen made him a national hero, and hundreds of thousands have turned out this week as his funeral procession stopped in various cities first across Iraq, where he was killed, and later across his home country. He’s to be buried Tuesday in the southeastern hometown of Kerman, where a sea of mourners has met the cortege, throwing flowers at the van carrying his remains.

Extended Influence

The general directed the foreign operations of Iran’s military, and was instrumental in extending Tehran’s influence across the Middle East through a network of proxy militias. His death has rippled across the region, with the U.S. and its allies on alert for retaliation, and questions swirling about the continued U.S. military presence in Iraq, deployed there to combat Islamic State and serve as a counterweight against Iran’s formidable influence.

A German lawmaker, Roderich Kiesewetter, said some German troops would temporarily be withdrawn from Iraq, and in Lebanon, the U.S. embassy tightened security in anticipation of retribution, according to a local news report.

Mohammad Javad Zarif, Iran’s foreign minister, said in Tehran on Tuesday that the U.S. would suffer consequences for the killing of Soleimani “at a time and place of Iran’s choosing.” The countdown has begun for the U.S. exit from the Middle East, he said, warning of a multi-generational war should the region continue to rely on the U.S. presence.

The Pentagon dispatched additional forces to the Middle East, even as conflicting signs emerged about Washington’s commitment to remaining in Iraq.

The three-ship Bataan Amphibious Readiness Group was ordered to move to the Persian Gulf region from the Mediterranean, where it has been exercising, according to a U.S. official. The group, which includes about 2,200 Marines and a helicopter unit, follows the deployment of about 3,500 soldiers from the Army’s 82nd Airborne to Kuwait late last week.

The show of force followed reports of a letter telling U.S. military officials in Baghdad that American personnel were repositioning in preparation to leave Iraq. Army General Mark Milley, chairman of the Joint Chiefs of Staff, told reporters Monday that a letter to that effect was a draft and should never have been sent. Defense Secretary Mark Esper, at a briefing alongside Milley, said “there is no decision to leave, nor did we issue any plans to leave or prepare to leave.”

(Updates with Pentagon designated as terrorist group in fourth paragraph, Soleimani funeral in fifth)

To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

To contact the editors responsible for this story: Benjamin Harvey at bharvey11@bloomberg.net, Amy Teibel

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