At noon AEST on Monday, the benchmark S&P/ASX200 index was down 38.9 points, or 0.5 per cent, to 7.749.2, while the broader All Ordinaries was down 46.3 points, or 0.58 per cent, to 8,003.9.
Israel's war cabinet was weighing how to respond after Iran fired hundreds of missiles and drones against Israel over the weekend.
Most of the barrage was intercepted but a seven-year-old girl was gravely wounded in the attack, a retaliation for Israel's April 1 strike on Iran's consulate in Syria.
"Everything has temporarily been placed on hold as the markets wake up and work out the risk of war in the Middle East," wrote Capital.com analyst Kyle Rodda.
The energy, materials and consumer staples sectors were slightly higher at midday and the ASX's eight sectors were lower.
Tech was the biggest loser, dropping 1.6 per cent as NextDC fell 3.8 per cent and Life360 dipped 2.5 per cent.
The Big Four banks were mixed, with CBA down 1.1 per cent, NAB dipping 0.7 per cent and ANZ edging 0.2 per cent lower, while Westpac was 0.1 per cent higher.
In the heavyweight mining sector, Rio Tinto was up 2.6 per cent and BHP had added 0.3 per cent, while Fortescue had subtracted 0.5 per cent.
Goldminers were down as the precious metal changed hands for $US2,360 an ounce, down from an all-time high of $US2,425 set over the weekend.
Evolution had dipped 1.4 per cent, Northern Star was 0.6 per cent lower and Gold Road Resources had fallen 6.6 per cent after confirming it was bidding for the Greenstone Gold Mine in Canada.
Piedmont Lithium had soared 29.3 per cent to 26.5c after receiving a mining permit for its proposed lithium permit in North Carolina, while Ioneer had grown 10.3 per cent to 21.5c after its Nevada lithium project moved further towards construction.
Droneshield was up 14.0 per cent to 97.5c after the drone-interception company reported $16.4 million in first-quarter revenues, 10 times more from a year ago, following strong orders from the US government.
Adherium had rocketed 67.5 per cent to 6.7c after receiving US clearance for using its Smartinhaler device in conjunctions with two medications made by AstraZeneca for patients with asthma or chronic obstructive pulmonary disease.
