A veteran Mossad spy was named to succeed director Meir Dagan on Monday, signalling the Israeli government's confidence in the intelligence service despite fallout from the assassination of a Hamas commander in Dubai.

Nominating Tamir Pardo for a job at the heart of Israel's secret war against Iran, Prime Minister Benjamin Netanyahu's office said he had "decades-worth of rich experience in the Mossad ... and is the right man to usher the organisation through the coming years in the face of complicated challenges". Pardo will next month replace Dagan, a hawkish ex-general who took over the Mossad in 2002 as part of an effort by then Prime Minister Ariel Sharon to hone more aggressive espionage.

Dagan was widely seen as responsible for a wave of covert actions including the sabotage of Iranian nuclear projects and assassination of Palestinian and Lebanese guerrilla leaders.

Fingers were pointed anew on Monday after bomb attacks in Tehran killed an Iranian nuclear scientist and wounded another. Iran blamed Israel and the United States. [nHAF925672]

Some Israeli officials had chafed at Dagan's unusually long tenure, and the criticism crested after Dubai accused the Mossad of killing Hamas commander Mahmoud al-Mabhouh at a hotel in the Gulf emirate in late January.

Israel has not commented on that charge. But publication of the alleged Israeli hit team's photographs, and of the European and Australian passports they forged for the mission, embarrassed the Netanyahu government at an especially touchy point in U.S.-sponsored peacemaking with the Palestinians.

Pardo, 57, served as a young officer in Israel's top commando regiment under Netanyahu's brother Yonatan, who died leading the rescue of hostages held by pro-Palestinian gunmen at Uganda's Entebbe airport in 1976.

Joining the Mossad in 1980, Pardo ascended the ranks to twice serve as Dagan's deputy before resigning last year. A source briefed on the episode said Pardo, like other Mossad officers of the same generation, had despaired at Dagan's apparent reluctance to groom a successor.

"Choosing Pardo means the government wants to keep things 'in the family' for the Mossad and let it know things will go on as before," the source, a former Israeli spy, told Reuters.

"When a secret service messes up, the tendency is to bring in an outsider for the top job, to wage reform. That's how Dagan came in, but it's not how he's leaving," the source said.

Pardo's closest rival for Mossad director was Yuval Diskin, head of the Israeli domestic intelligence service Shin Bet. Dagan had used Diskin as an occasional outside consultant.