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Fresh deaths and a surge in new coronavirus cases in Iran, Japan and South Korea on Tuesday fuelled fears of a pandemic as the disease took root in more countries.

The rapid spread abroad came as the World Health Organization announced that the epidemic had peaked at its epicentre in China, where it has killed more than 2,600 people and infected over 77,000 others.

But the situation has worsened elsewhere with nearly 2,700 other cases and more than 40 deaths globally, prompting restrictions on travellers from infected nations, the cancellation of football matches and national efforts to isolate suspected patients. South Korea, Italy and Iran have each logged sharp increases in infections and deaths, while several Middle Eastern countries also reported their first confirmed COVID-19 cases.

WHO chief Tedros Adhanom Ghebreyesus insisted the virus could still be contained, praising China's drastic quarantine measures in several cities for helping to prevent an even bigger spread.

"For the moment we are not witnessing the uncontained global spread of this virus and we are not witnessing large-scale deaths," Tedros told reporters in Geneva on Monday.

The White House plans to spend $2.5 billion to combat the epidemic, according to US media. There are 53 cases in the United States so far.

Iran has emerged as a major hotspot with the death toll rising to 15 on Tuesday as three more people succumbed to the disease.

Iran has confirmed 61 cases so far, making its mortality rate exponentially higher than anywhere else in the world and raising suspicion that many more people have contracted the disease there.

South Korean President Moon Jae-in warned that the outbreak was "very grave" as the country's death toll rose to 10 and the number of confirmed infections approached 1,000 - the largest total outside China.

Scores of events have been cancelled or postponed as the outbreak has spread in the world's 12th-largest economy, from K-pop concerts to the World Team Table Tennis championship.

In Japan, a fourth former passenger of the coronavirus-stricken Diamond Princess cruise ship died, according to local media. The man was in his 80s.

Nearly 700 people from the quarantined ship have tested positive for the illness so far.

Infections have also spiked inside Japan, with at least 160 cases including one death.

Italy - which has reported seven deaths and over 200 cases - has locked down 11 towns, while upcoming football matches in its Serie A and the Europa League will be played behind closed doors. Prime Minister Giuseppe Conte has said that residents could face weeks of lockdown. In China, 508 new cases were reported, with all but nine at the outbreak's epicentre in central Hubei province.

The death toll nationwide reached 2,663 on Tuesday after 71 more people died, the lowest rise in almost three weeks.

Reassured by the official numbers, the country is gingerly returning to business.

Copyright Agence France-Presse, 2020

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