Iran has vowed to avenge the death of Mohsen Fakhrizadeh, who was killed on Friday outside Tehran.

"We call on all parties to avoid taking any action which could lead to a new escalation of the situation" which "we absolutely do not need at this moment," a German foreign ministry spokesman said.

"Weeks before a new government takes office in the United States existing dialogue with Iran must be maintained in order to resolve through negotiation the conflict over Iran's nuclear programme," the spokesman told AFP.

Iran's President Hassan Rouhani has accused arch-foe Israel of acting as a "mercenary" for the United States and seeking to create chaos.

Fakhrizadeh, who Israel viewed as the "father of Iran's nuclear programme", died after being seriously wounded when assailants targeted his car, according to Iran's defence ministry.

Israel has refused to comment on the assassination, which comes as US President-elect Joe Biden prepares to take office after a tumultuous four years of hawkish US foreign policy in the Middle East under Donald Trump.

Trump in 2018 pulled the United States out of a 2015 international accord curbing Iran's nuclear activities in return for the lifting of sanctions.