Since the fall of the Soviet Union, relations have been strained between Estonians and Russian speakers. Less than half of the Slav minority hold Estonian citizenship.
The icon in the city's Ukrainian Greek Catholic Church, reproduced on the website of the SL Ohtuleht newspaper, portrays Laar among senior church figures under the protective arms of the Mother of God.
"We think this is a vivid illustration of the fact that integration works in Estonia," a spokesman for Mr Laar's party, the nationalist Pro Patria Union, told the paper.
Strained relations
Slavs form the largest ethnic minority in the Baltic nation of 1.4 million, having settled here under the Russian empire and then the Soviet Union.
Since the fall of the Soviet Union, relations have been strained between Estonians and Russian speakers. Less than half of the Slav minority hold Estonian citizenship.
Many have complained about the stringency of Estonian language tests required for citizenship. Some 300 Russian-speaking policemen lost their jobs in 1999 after failing to pass the tests.
Dispute
The dispute has also spread to the church community. Estonian and Russian Orthodox churches clashed recently over the plans of the Russian church to register as an Estonian organisation.
But the authorities of the newly opened Ukrainian Greek Catholic church describe Mr Laar's iconic image as a gesture of respect for their host nation.
Anatoliy Lyutyuk, a congregation elder, said the icon pays tribute to Mr Laar who was premier when the church was consecrated, but stops short of declaring him saint.
"We have always learnt about our secular leaders from icons," Lyutyuk said.
West-loving liberal
Mr Laar describes himself as a free-market liberal and an active supporter of Estonia's entry into the EU and Nato. He speaks several languages and is an author of historical works.
Pleasant as his surprise iconic status may be, Mr Laar hopes to be remembered for his connections to the West, not for his popularity in an Eastern European church.
In a recent newspaper interview, he said he wanted to be known as the man who closed the Soviet page in Estonia's history.
"I hope that Mart Laar will go down in history as the man who completed the process of making Estonia's westernisation irreversible," he told the Estonian newspaper Postimees.
Photo reproduced with the kind permission of Tiina Korstini, of SL Ohtuleht newspaper.
BBC Monitoring, based in Caversham in southern England, selects and translates information from radio, television, press, news agencies and the Internet from 150 countries in more than 70 languages.