SINGAPORE/LONDON (Reuters) -Israel launched large-scale strikes against Iran on Friday, saying it had attacked nuclear facilities and missile factories and killed a swathe of military commanders in what could be a prolonged operation to prevent Tehran building an atomic weapon.

U.S. President Donald Trump suggested that Iran had brought the attack on itself by resisting U.S. demands in talks to restrict its nuclear programme, and urged it to make a deal, "with the next already planned attacks being even more brutal".

Washington said it had no part in the operation, however.

MARKET REACTION: U.S. stock futures fell 1.5%, oil prices jumped and gold rallied. The U.S. dollar rallied.

QUOTES:

JAMES ROSSITER, HEAD OF GLOBAL MACRO STRATEGY, TD SECURITIES, LONDON:

"This is a flight-to-safety event. But markets are struggling a bit and in the fixed income space you have an oil-price shock that is inflationary and so you should see markets expecting an even more hawkish Fed. On the other hand, you have the flight-to-safety, which should push bond yields lower."

"On the dollar side, it seems like a cleaner move."

"The U.S. was very quick to come and say 'this (the Israeli strike) has nothing to do with us' and then we have Trump's comments. He's still clearly pushing for the Iranian to talk. There are these talks that have been scheduled for Sunday."

MATT SIMPSON, SENIOR MARKET ANALYST, CITY INDEX, BRISBANE:

"Israel's 'pre-emptive' strike on Iran has sent volatility surging during Asian trade on Friday. Traders are now on edge over the prospects of a full-blown Middle East conflict, given Iran had already warned it would target Israel’s nuclear facilities if attacked first.

"It's now a question of when Iran will respond, not if. And that will keep uncertainty high and volatility elevated.

""Crude oil has since broken above its June 2022 bearish trendline, with a move to the highs around $78 or even the $80 now within easy reach. The question now is whether this is a typical geopolitical knee-jerk reaction from markets, which results in lots of hype with no delivery. Or if the US really is on the brink of navigating a Middle East war."

CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC, SINGAPORE:

"USD rebounded this morning, alongside other safe-haven proxies, including CHF, JPY and gold on geopolitical escalation. Not surprisingly, risk proxies including AUD, KRW traded on the backfoot. Geopolitical noises may temporarily distort USD downtrend and temporarily weigh on risk proxies especially heading into the weekend."