While I wouldn't say Israel has lost its prestige entirely, after all they still managed to carry out targeted assassinations and temporarily disable Iran's air defences keeping Mossad's fearsome reputation intact. However, they have lost the illusion of invincibility. The myth that regional powers wouldn't dare respond has been shattered. They have been struck, and they have been struck hard. Their geographic limitations cant be ignored.
As for Iran, despite suffering significant damage to key infrastructure, much of their critical military and nuclear capabilities remain intact. In that sense, they may have taken a hit, but they passed the test of resilience. What was meant to cripple them only proved their capacity to absorb and withstand high-level of damage. However, this does not mean it shouldn't work on itself because this conflict has shown Iran has more weaknesses than initially thought.