Fares al-Obeidi, a doctor, confirmed that the legislator, who was shot in the chest, died of his wounds.

Al-Graydi's driver was also wounded in the incident.

Police said that one person was arrested after Iraqi and US security forces cordoned off the area.

Ali Hassan, a neighbour, said: "We heard the sound of shooting then we came out immediately. We found them lying on the ground and chaos surrounded the area."

"The relatives who were with Hamid said that the gunmen were on foot."

Political tensions

Iraqiya, headed by Iyad Allawi, a former prime minister, emerged the largest party in the parliamentary elections in March, with 91 seats in the country's 325-member house.

The assassination is expected to increase tension surrounding the March 7 polls, the results of which are yet to be certified.

The major Shia-dominated Iraqi political blocs, Nouri al-Maliki's State of Law and the Iraqi National Alliance, which has close ties to neighbour Iran, have announced plans to unite to form the largest bloc in parliament.

But Allawi has cautioned that any attempt to marginalise Iraqiya could trigger renewed sectarian violence.

Mosul, 350km north of Baghdad, is the capital of Ninawa province and the scene of frequent unrest.