Talking to the Mehr News Agency on condition of anonymity, the source added that Rajavi was arrested in Iraq, while he was preparing to leave the country for an unknown destination.
He is in the custody of the U.S. forces, he said.
The MKO is on the terrorist list of the European Union and the U.S. State Department.
According to international law Rajavi, who is on the blacklist of the U.S. State Department for his terrorist acts, should be extradited to Iran.
The United States launched a campaign against terrorism after the September 11 attacks.
After the collapse of Saddam Hussein's regime in Iraq, U.S. officials and Rajavi reached an agreement allowing the terrorist group to remain in Iraq and keep their arms -- a clear indication of the double standards used by the U.S. in its campaign against terrorism.
Having faced some limitations in Iraq, some of the members of the MKO left Iraq for European countries.
French police last Tuesday launched a major crackdown on the MKO detaining more than 150 of its members in a series of dawn raids in the Paris region.
Among those arrested in the operation -- described by the French interior ministry as one of the biggest undertaken by the domestic intelligence services in the last 30 years -- was Maryam Rajavi, the group's Ringleader and wife of Masoud Rajavi, according to the AFP.
Iran has been demanding the extradition of the terrorist members of the MKO whose hands are tainted with blood of innocent Iranians. The MKO planted two bombs in 1981 in the offices of the Islamic Republic Party and the Prime Minister office, killing more 70 top officials, including the Judiciary Chief Ayatollah Mohammad Hosseini Beheshti, president Mohammad Ali Rajai and prime minister Mohammad Javad Bahonar.
In several other bombings in the holy places or public places the group killed numerous civilians and assassinated high-ranking officials.
France's counter-intelligence chief said in Paris on Friday that the terrorist Mujahedeen Khalq Organization (MKO) was beefing up its bases in France to make it a global operations center for terrorism, stressing that the group had already become "a dangerous cult".
Pierre de Bousquet, head of the DST internal security agency, told Le Figaro newspaper that the DST believed the MKO was upgrading its base in France, in Auvers-sur-Oise, north of Paris, that for years has served as their headquarters, from which they were planning to launch attacks on Iranian embassies in Europe.
Bousquet added that this week's round-up of MKO members was justified as the group "had become a dangerous, fanatical cult, and since a long time had slipped into the logic of terrorism".
"The Mujahideen has seen a sectarian shift that illustrates the fanaticism of its militants. The dramatic immolations of recent days sadly confirm this," de Bousquet said.
"Its members must show blind devotion to Massoud Rajavi and his wife, and a high price is paid for the slightest criticism."
The dissident former members of the MKO say a “cult” is by far the best word to describe the inner workings of the MKO.
Five dissidents of the MKO gathered in Arnhem, The Netherlands, Saturday to discuss its fatal flaws in a small flat in the city, where one of them has been granted political asylum.
“The Mujahedeen are anything but democratic,” Karim Haggi Moni, a former “cadre” of the movement who became a dissident in the early 1990’s, told the AFP.
“The Rajavis (Mujahedeen commander Masud Rajavi and his wife Maryam, who is now in French police custody) behave like they’re God’s representatives on the earth and are responsible to no one. They brook no criticism. It feels like being in a cult,” said Haggi Moni, who used to head Maryam’s bodyguards.
Haggi Moni, a man in his early forties who first joined the Mujahedeen one year before Iran’s 1979 Islamic Revolution, said the Rajavis forced all the couples who lived in a Mujahedeen camp in Iraq - where the movement enjoyed Saddam Hussein’s protection - to split.
“All the men were separated from their wives and children. They also forced us to break all contact with our friends,” he said.
Mohammad Hossein Sobhani, a former member of the Mujahedeen’s central council in Iraq who now lives in Germany, concurred.
“The idea was to prevent spouses from giving each other support, and to compare notes on what they thought of the movement,” Sobhani said.
Dissidents in Both Germany and The Netherlands say they were forced to write detailed reports about their private lives, and also to report about other members to help leaders detect any “suspicious behavior”.
AA/SM
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MNA