The killing of Mohsen Fakhrizadeh -- whom Israel has dubbed the "father" of Iran's nuclear weapons programme -- has once more heightened tensions between Tehran and its foes, with President Hassan Rouhani accusing the Jewish state of acting as Washington's "mercenary".

Fakhrizadeh died on Friday after being seriously wounded when assailants targeted his car and engaged in a gunfight with his bodyguards outside Tehran, according to Iran's defence ministry.

The funeral got underway with a religious singer alluding to the martyrdom of Imam Hossein, a revered seventh century holy figure from whom Shiite Muslims draw inspiration.

A large display showed a picture of the slain scientist next to Iran's supreme leader Ayatollah Ali Khamenei, as well as former top general Qasem Soleimani, who was killed by the US in a drone strike in Baghdad early this year.

Iran's parliament on Sunday demanded a halt to international inspections of nuclear sites in the country, signalling another potential retreat from a key commitment in its 2015 nuclear deal with world powers, while a top official hinted Iran should leave the global non-proliferation treaty.

The Supreme National Security Council usually handles decisions related to the country's nuclear programme, and parliamentary bills must be approved by the powerful Guardians Council.

President Rouhani has stressed his country will seek its revenge for the assassination in "due time" and not be rushed into a "trap", with less than two months to go before US President Donald Trump leaves office after four hawkish years at the White House.

US President-elect Joe Biden has promised a return to diplomacy with Iran, after Trump unilaterally withdrew from the Iran nuclear deal in 2018 and began reimposing crippling sanctions.

- 'Deter & take revenge' -

Israel says Fakhrizadeh was the head of an Iranian nuclear weapons programme, the existence of which the Islamic republic has consistently denied, and Washington had sanctioned him in 2008 for activities linked to Iran's atomic activities.

The head of Iran's Expediency Council, a key advisory and arbitration body, said there was "no reason why (Iran) should not reconsider the Nuclear Proliferation Treaty".

Mohsen Rezai said Tehran should also halt implementation of the additional protocol, a document prescribing intrusive inspections of Iran's nuclear facilitates.

Khamenei called Saturday for Fakhrizadeh's killers to be punished and parliament speaker Mohammad-Bagher Ghalibaf on Sunday urged "a strong reaction" that would "deter and take revenge" on those behind the killing of Fakhrizadeh, who was aged 59 according to Iranian media.

Parliament called for International Atomic Energy Agency (IAEA) inspectors to be barred from the country's atomic sites, according to the legislature's news agency ICANA, after some lawmakers had accused inspectors of acting as "spies" who were potentially responsible for Fakhrizadeh's death.

Since Trump's withdrawal from the nuclear deal, Iran has abandoned key commitments under the deal, including limits to the production and stockpiling of low-enriched uranium.

- Call for strikes -

For Israeli newspaper Haaretz, Fakhrizadeh's killing was clearly tied to Biden's arrival in office.

"The timing of the assassination, even if it was determined by purely operational considerations, is a clear message to President-elect Joe Biden, intended to show Israel's criticism" of plans to revive the nuclear deal, it said.

The United Arab Emirates, which in September normalised ties with Israel, condemned the killing and urged restraint.

The foreign ministry, quoted by the official Emirati news agency WAM, said Abu Dhabi "condemns the heinous assassination of Mohsen Fakhrizadeh, which could further fuel conflict in the region.

"The UAE calls upon all parties to exercise maximum degrees of self-restraint to avoid dragging the region into new levels of instability and threat to peace," it said.

Britain, a party to the 2015 nuclear accord, said Sunday it was "concerned" about possible escalation of tensions in the Middle East following the assassination, while Turkey called the killing an act of "terrorism" that "upsets peace in the region".

In Iran, ultra-conservative Kayhan daily called for strikes on Israel if it were "proven" to be behind the assassination.

Kayhan called for the port city of Haifa to be targeted "in a way that would annihilate its infrastructure and leave a heavy human toll".