U.S. Embassy in Tel Aviv
U.S. Embassy in Tel Aviv Photo by Ariel Schalit
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Al-Qaida leader Ayman al-Zawahiri. Photo by AP

Israel's claim that it had broken up an Al-Qaida cell that was plotting to bomb the U.S. Embassy in Tel Aviv and other buildings was rejected on Thursday by Palestinian security sources, who alleged Israel had concocted the story to bolster its position in peace talks.

Shin Bet officials announced on Wednesday that they had arrested three Palestinians in December, two of them East Jerusalem residents with Israeli identification cards, for alleged involvement in an Al-Qaida plan to carry out the attacks. Details of the arrest were revealed after a gag order on the case was lifted.

The group had planned two simultaneous suicide attacks, one at the United States Embassy in Tel Aviv and the other at the International Convention Center in Jerusalem, the Shin Bet said.

The Israeli officials claimed the suspects had been recruited over the Internet by an operative working for Ayman al-Zawahiri, who replaced Osama bin Laden as the terror group's leader after U.S. forces killed him in May 2011.

However, a spokesman for the Palestinian security services in the West Bank said there was "no indication" that Al-Qaida had a presence in the territory.

"Al-Qaida cannot operate here," Adnan Damiri, said. "It needs broad logistical support and that cannot be here in this small area."

Israel, he said, had arrested some naive "boys" and claimed they were Al-Qaida to halt American pressure to show more flexibility in peace talks. Israel has demanded that it retain a presence in parts of the Palestinian-claimed West Bank after any future peace deal due to security concerns.

U.S. officials said they were unable to verify the Shin Bet's claims, including the alleged link to Al-Qaida, NBC News reported. "The validity is something we're still looking at," a senior State Department official said.

One of the suspects was identified as Ala Ghannam, 21, from Aqaba, a village near the northern West Bank town of Jenin. His cousin, Arafat Ghannam, told The Associated Press that the 21 year old was arrested by the Israeli military two-and-a-half weeks ago in a night raid.

He said Palestinian intelligence forces had arrested him just a week before and had let him go. The Palestinians arrested him because of "Islamic views" he expressed on Facebook, the cousin said, without elaborating. He said the family was not aware about his alleged interest in al-Qaida but said they were not shocked to hear about it.

Israeli security officials have long warned of the threat of what they call "global jihad," the term they use for various militant groups in the Gaza Strip and Egypt's Sinai Peninsula inspired by al-Qaida's ideology and tactics. But Wednesday's announcement was the first time that Israel explicitly accused the group of being behind an attempted attack.

Officials believe there are several hundred of these militants, known as Salafists, in Gaza, though their presence in the West Bank is far more limited. Palestinian security forces recently arrested about 20 young men who allegedly tried to set up a Salafist organization. Officials have described the men as disaffected youths who had no training in weapons or attacks.