According to the report, the suspects arrested were mostly Palestinians residing in Syria. The source did not say how many people were detained.
The Lebanese newspaper al-Akhbar, affiliated with the Hizbullah organization, reported Friday that the investigation conducted by Syrian security services into the assassination of the arch-terrorist was in advanced stages.
According to the report, investigators on behalf of Hizbullah and Iran were taking part in the Syrian investigation.
The Lebanese source also reported that Hizbullah had appointed a successor to its senior commander hours after the announcement of Mugniyah's death in a car bomb in Damascus. He did not identify the successor who would now command Hizbullah's formidable and well-armed guerrilla army.
"A successor to Imad Mugniyah has been appointed, which is natural," said the source, who requested anonymity. "That's how Hizbullah works, they move quickly to choose successors of fallen leaders."
The source said the successor was not one of the two names being circulated in the Israeli media. Hizbullah leader Hassan Nasrallah has threatened Israel with "open war" in retaliation for the killing.
Iranian Deputy Foreign Minister Alireza Sheikh Attar confirmed that the Islamic republic and Syria had decided to establish a joint task force to investigate the circumstances surrounding Mugniyah's assassination.
According to Attar, the decision was made following discussions between Iranian Foreign Minister Manouchehr Mottaki and the Syrian leadership in Damascus.
Speaking before the Friday prayer, the senior Iranian Foreign Ministry official praised Mugniyah and his part in the Second Lebanon War.
"He was one of Hizbullah's most religious and veteran commanders, who brought a humiliating defeat upon the Zionist regime during the Second Lebanon War. His plans will be written and learned in the military schools."
'A year of victory for resistance'
Hundreds of people marched in Tehran on Friday in memory of Mugniyah following the Friday prayers, slamming "the Zionists' crimes," the Iranian news agency Mehr reported.
The parade was organized by Hizbullah representatives in the Iranian capital. The marchers chanted slogans against Israel and the United States.
On Thursday, Hizbullah leader Nasrallah threatened Israel, saying that "they think that because of this (act) the resistance will be weakened, but our campaign continues. Imad's blood only encourages us…in the next war you will not encounter one or one thousand like Winograd (chief judge on investigatory commission of Second Lebanon War) said. You will encounter tens of thousands of Imad Mugniyahs."
Meanwhile Friday, Iranian Foreign Minister Mottaki met in Damascus with Hamas politburo chief Khaled Mashaal and Islamic Jihad Secretary-General Ramadan Shallah, the Islamic Republic News Agency reported.
Mottaki expressed his hope that 2008 would be "the year of victory and revival of the resistance in Lebanon and Palestine" and "a year of failure for America and Israel."
Mashaal thanked Iran for its humanitarian aid to Gaza and for the Iranian and Egyptian presidents' efforts to end the siege imposed on the Strip.