Top Hezbollah commander Imad Moughniyah, accused of masterminding a hijacking, suicide bombings and hostage takings of U.S. and Israeli targets in the 1980s, was killed by a car bomb in Damascus, the Shi'ite Muslim group said on Wednesday.

Hezbollah, which is backed by Syria and Iran, accused Israel of killing Moughniyah, 45. The Israeli government declined to comment.

Moughniyah had long been on a list of foreigners Israel wanted to kill or capture and had also been among the FBI's most wanted.

After a life full of jihad, sacrifices and accomplishments ... Haj Imad Moughniyah ... died a martyr at the hands of the Israeli Zionists, said Hezbollah, which fought a 34-day war in 2006 with the Jewish state.

Islamic Jihad, a shadowy pro-Iranian group widely believed linked to Hezbollah, kidnapped several Western hostages, including Americans, in Beirut in the mid 1980s.

The group, at the time thought to be commanded by Moughniyah, killed a few of its captives and exchanged others for U.S. weapons to Iran in what was later known as the Iran-Contra scandal.

Among the victims was the CIA's station chief.

The group was also linked to suicide bomb attacks against the U.S. embassy, French paratroopers and Marine headquarters in Lebanon that killed more than 350 Americans and Frenchmen in the 1980s.

Israel accuses Moughniyah of masterminding the 1994 bombing of a Jewish centre in Buenos Aires that killed 87 people and of involvement in a 1992 bombing of the Israeli embassy in the Argentinian capital that killed 28.

A spokesman for Israeli Prime Minister Ehud Olmert declined to comment. We have released no statement on this matter, Mark Regev said.

Moughniyah's brother was killed in a car bomb in Beirut in 1994. Reports at the time suggested Imad had been the target. Moughniyah had spent much of the 1990s in Iran making, only few visits to Beirut.

He had been on the FBI's list most wanted terrorist list for his role in planning and participating in the June 14, 1985, hijacking of a commercial U.S. TWA airliner.

The United States has offered a reward for information leading directly his arrest and conviction.

Israel Terrorism