Bahman Golbarnezhad, 48, suffered a heart attack on the way to the hospital in Rio de Janiero. The Iranian flag has been lowered to half-staff at the Paralympic Village.
More than a million Muslims have embarked on the yearly hajj pilgrimage to Mecca, after last year's holy event was marred by a deadly stampede that killed hundreds and stoked regional tensions.
Spokesman John Kirby still insists that the $400 million was "leverage," not ransom for the Iranian Americans released in January — though the payment was withheld until the prisoners were freed.
Iran says nuclear scientist Shahram Amiri had been providing information to the U.S. Amiri's story reads like a spy saga, full of twists and allegedly shifting allegiances.
State Department spokesman John Kirby said there was no quid pro quo with the $400 million payment, which he said was tied to a claim Iran launched in an international tribunal.
Boeing has agreed to sell or lease about 100 commercial jets to Iran Air. The deal is seen as a test case for international companies that are skittish about doing business with Iran.
The Chicago-based aircraft manufacturer is the first major U.S. company to do business in Iran since sanctions were lifted earlier this year as part of the international nuclear accord.
As his time in office winds down, President Obama has sought to jettison vestiges of the Cold War and reach out to old rivals, from Vietnam to Cuba and beyond.