Element ignited with smell containing iodine (7)
I believe the answer is:
lithium
'element' is the definition.
(lithium is a kind of element)
'ignited with smell containing iodine' is the wordplay.
'ignited' becomes 'lit' ('lit' can be a synonym of 'ignited').
'with' says to put letters next to each other.
'smell' becomes 'hum' (I have seen 'Unpleasant smell ' mean 'hum' so perhaps 'smell' could also mean 'hum'**).
'containing' is an insertion indicator.
'iodine' becomes 'i' (I is the chemical symbol for iodine).
'hum' placed around 'i' is 'hium'.
'lit'+'hium'='LITHIUM'
(Other definitions for lithium that I've seen before include "Silver-white metal (symbol: Li)" , "Soft silvery element" , "Chemical element (Li), used in batteries" , "Lightest alkali metal" , "Lightest-known metal" .)