"The four-man cell planned to assassinate three leaders," the source said, adding that the targets came from the northern West Bank city of Nablus.
Three of the suspects, including a senior member of the Palestinian security services, were arrested more than two months ago, the source said, while a fourth was on the run.
The targets were Ghassan Shakaa, a member of the Palestine Liberation Organisation executive committee, as well as Jamal al-Tirawi and Amin Maqbool, officials in president Mahmud Abbas' Fatah party, the source added.
Tirawi confirmed the plot, saying all of the suspects were also members of Fatah and were known to him personally.
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"The three suspects admitted planning the assassination," he told AFP.
He added that the fourth person was the "key to solving the puzzle" of who was supporting them.
Akram Rajoub, governor of Nablus, declined to confirm or deny the plot to AFP, saying the matter was under investigation.
"When we finish the investigation we will declare all the details."
The Palestinian General Intelligence announced the matter was under investigation yesterday.
On July 1, unidentified gunmen fired at former Nablus mayor Shakaa's home while he was sleeping, causing damage but no casualties.
A number of suspects were arrested and allegedly confessed to the crime.