German President Frank-Walter Steinmeier dissolved parliament on Friday and confirmed the expected February date for an early general election after the collapse of Olaf Scholz's government last month.

Scholz's coalition was brought down by internal fights over how to revive Europe's largest economy, but a deadly car-ramming attack at a Christmas market last week has renewed the country's heated debates over security and immigration.

Confirming the February 23 date for the election, Steinmeier emphasised the need for "political stability" and appealed for the campaign to be "conducted with respect and decency."

A Saudi doctor, Taleb al-Abdulmohsen, 50, was arrested at the scene of the attack on the Christmas market in the eastern city of Magdeburg which left five people dead and more than 200 injured.

Interior Minister Nancy Fraser has said Abdulmohsen held "Islamophobic" views but his exact motive remains unclear.

In the wake of the attack, Scholz appealed to Germans to "link arms" and to not allow "hatred to determine our coexistence."

The conservative CDU/CSU is leading in the polls on around 32 percent under its leader Friedrich Merz and even before last week's attack it had been promising a harder line on immigration as well as a rightward shift on social and economic policy.

In second place on 19 percent is the far-right Alternative for Germany (AfD), which held what it called a "memorial" rally in Magdeburg on Monday.

At the event, the AfD's regional leader Jan Wenzel Schmidt said Germany could "no longer take in madmen from all over the world" and demanded the country "close the borders." (AFP)