Hassan Sayad Khodai, accused by Israel of plotting attacks against its citizens worldwide, was shot dead at the wheel of his car by two people on a motorcycle. The tactic echoed previous killings in Iran that focused on nuclear scientists and were widely pinned on Mossad.

Iran's semi-official ISNA news agency said members of an Israeli intelligence service network had been discovered and arrested by the Guards immediately after the Tehran shooting.

Bennett's office, which oversees intelligence agency Mossad, has declined to comment on the assassination.

However, in broadcast remarks to his ministers on Sunday, Bennett accused Iran of repeatedly targeting Israeli interests.

"For decades, the Iranian regime has practiced terrorism against Israel and the region by means of proxies, emissaries, but the head of the octopus, Iran itself, has enjoyed immunity," Bennett said.

"As we have said before, the era of the Iranian regime's immunity is over. Those who finance terrorists, those who arm terrorists and those who send terrorists will pay the full price," he added.

Iran has promised to retaliate for Khodai's death and pointed the finger at Israel.