Lebanese militant leader Samir Kuntar was killed when a number of rockets hit a building in the Damascus district of Jaramana in the early hours on Sunday, Syrian government loyalists said on social media.
His brother Bassam Kuntar also mourned him on his Facebook page without giving details about his death, but said his brother was a martyr.
"With pride we mourn the martyrdom of the leader Samir Kuntar and we are honored to join families of martyrs," Bassam Kantar said on his Facebook page.
Syria's state media, which did not mention Kuntar, blamed "terrorist groups" for the attack and said it caused casualties.
But government loyalists said the explosions were an Israeli strike believed to have killed Kuntar, who is reviled in Israel for a 1979 attack that killed four people.
Israel released Kuntar, a Druse, in 2008 as part of a prisoner swap with the Lebanese Shi'ite Hezbollah group and he is believed to have joined the group since.
He was welcomed as a hero in Beirut and he married a Lebanese Shi'ite woman from a Hezbollah family.
The National Defense Forces in Jaramana, which are part of a nationwide grouping of loyalist Syrian militias under the umbrella of the army, mourned Kuntar and one of its commanders on its Facebook page.
"His (Kuntar) body has been sent to a Damascus hospital moments ago," it said.
After his release, Kuntar kept a low public profile. But it is believed that he had become a commander in Hezbollah, which has sent hundreds of its members to fight alongside forces loyal to President Bashar Assad.
However, it was not immediately clear what role Kuntar, born in 1962, plays in the fighting in Syria.
Israel has struck Syria several times since the start of the war five years ago, mostly destroying weaponry such as missiles that Israeli officials said were destined for Hezbollah, Israel's long-time foe in neighboring Lebanon.
In January, an Israeli strike in Syria killed six members of Hezbollah, including a commander and the son of the group's late military leader Imad Moughniyah in the province of Quneitra, near the Israeli-occupied Golan Heights.
Syrian government loyalists blamed Israel for the attack on Sunday.
"Two Israeli warplanes carried out the raid which targeted the building in Jaramana and struck the designated place with four long range missiles," the NDF in Jaramana Facebook page said.
It was not immediately possible to confirm the reports.
Jaramana is a bastion of government support and is the home of many of Syria's Druse minority as well as Christians.