Zedi Feruzi, the leader of the Union for Peace and Development (UPD), a small Burundian opposition party, was shot dead yesterday.
The attack risks further fuelling tensions in the capital where a heavy-handed crackdown on anti-government demonstrations has left around 30 dead since late April.
The crisis also sparked a failed coup against President Nkurunziza last week.
Condemning "an awful act", activists said in a statement they were "suspending participation in dialogue with the government".
Burundi's crisis, which began in late April after the ruling party nominated Nkurunziza to stand again in the June 26 presidential election, deepened last week when a top general staged a failed coup attempt.
Parliamentary polls, initially set for May 26, have been postponed to June 5.
Opposition and rights groups say that Nkurunziza's bid for a third five-year term violates the constitution and conditions of a peace deal that ended a 13-year civil war in 2006.
Nkurunziza, a former rebel leader and born-again Christian who believes he has divine backing to lead the country, argues that his first term did not count as he was elected by parliament, not directly by the people.
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