The Bethe-Salpeter equation (BSE) is currently the state of the art in the description of neutral electron excitations in both solids and large finite systems. It is capable of accurately treating charge-transfer excitations that present difficulties for simpler approaches. We present a local basis set formulation of the BSE for molecules where the optical spectrum is computed with the iterative Haydock recursion scheme, leading to a low computational complexity and memory footprint. Using a variant of the algorithm we can go beyond the Tamm-Dancoff approximation (TDA). We rederive the recursion relations for general matrix elements of a resolvent, show how they translate into continued fractions, and study the convergence of the method wit...