The pair are said to have been recruited by followers of Osama bin Laden terror network in Jordan and had been planning to carry out a double attack on the French Hill neighbourhood in Israeli-annexed east Jerusalem last December.

The sources said that Azzam Abu Aladas et Balal Hafnawi, who both appeared in a top security court on Tuesday, had planned to explode a massive bomb in a restaurant and then detonate a car bomb when the rescue services arrived.

The pair, who come from Nablus’s Balata refugee camp, were arrested as they crossed over the Allenby Bridge border crossing with Jordan.

They have both been charged with conspiring to intentionally cause death, active membership in a terror organisation, illegal assembly and additional charges.

It is the first time that alleged members of Al Qaeda have been arrested by the Israeli security services.

Palestinian leader Mahmud Abbas said earlier this month that his security services believed an Al Qaeda cell was operating in the Palestinian territories.

General Dani Arditi, head of Israel’s anti-terrorist office, said last October that Al Qaeda had infiltrated the Gaza Strip from Egypt’s neighbouring Sinai peninsula after the withdrawal of Israeli troops the previous month.

Al Qaeda is believed to have been behind two major attacks on the Sinai: a bombing at the Red Sea resorts of Taba in October 2004 and Sharm el-Shaikh last July, which combined left more than 100 people dead.