Mughniyeh was also on the FBI's list of most wanted terrorists, and the U.S. State Department had offered a $5 million reward for information leading to his arrest or conviction. He was indicted in the U.S. for his role in planning the 1985 hijacking of a TWA airliner in which a U.S. Navy diver was killed.
The United States welcomed Mughniyeh's death.
"The world is a better place without this man in it," State Department spokesman Sean McCormack said. "One way or the other, he was brought to justice."
"From Beirut to Dhahran, he orchestrated bombings, kidnappings and hijackings in which hundreds of American service members were killed," Pentagon spokesman Geoff Morrell said in a statement. "Hopefully, his demise will bring some measure of comfort to the families of all those military men he murdered."
The hijacking was the only attack on Americans for which Mughniyeh was charged, but he carried out or directed a series of terrorist spectaculars aimed at the United States and Jewish targets.
Mughniyeh's death was the latest in a series of blows to major terror figures in recent weeks. Abu Laith al-Libi, a senior al-Qaida leader, was killed in Pakistan in late January by a missile fired from a U.S. drone. This week, Pakistani security forces critically wounded and captured Mansour Dadullah, a top Taliban figure, in a firefight near the Afghan border.
But Mughniyeh, a Shiite Muslim not known to be connected to the Sunni al-Qaida or Taliban, harkened back to an earlier era of terror. A secretive, underground operator whose name was not even known for years, he was one of the first to turn Islamic militancy's weapons against the United States in the 1980s.
Mughniyeh emerged during the turmoil of Lebanon's 1975-1990 civil war, rising to become Hezbollah's security chief, and the dramatic suicide bombings he is accused of engineering in Beirut were some of the deadliest against Americans until al-Qaida's Sept. 11, 2001 attacks.
He vanished in the early 1990s, reportedly undergoing plastic surgery and moving between Lebanon, Syria and Iran on fake passports. But Western intelligence agencies believe he then took his terror attacks abroad, hitting Jewish and Israeli interests in Argentina, among other places.
One Western official, speaking on condition of anonymity to discuss intelligence matters, said Wednesday that Mughniyeh was linked to the 1996 bombing of the Khobar Towers near Dhahran in Saudi Arabia, an attack which killed 19 Americans.
Mughniyeh continued to head external operations for Hezbollah and was "very active and very dangerous," the official said.
His slaying could raise tensions between Israel and Hezbollah, as well as with the militant group's allies, Syria and Iran. Israel and Hezbollah fought a bloody war in the summer of 2006, and some Lebanese figures close to the Shiite militant group called Wednesday for attacks against Israel in retaliation for Mughniyeh's death.
It could also worsen the turmoil in Lebanon, where Hezbollah is locked in a power struggle with the U.S.-backed government.
Hezbollah called for a huge turnout at Mughniyeh's funeral in south Beirut on Thursday. The same day, government supporters are planning a rally of hundreds of thousands in downtown Beirut to mark the third anniversary of the assassination of former Prime Minister Rafik Hariri.
With fears growing of street violence between the two camps, the U.S. Embassy strongly encouraged American citizens in Lebanon to limit all but essential travel Thursday.
Hezbollah announced on its Al-Manar television that Mughniyeh "became a martyr at the hands of the Zionist Israelis." The station played Quranic verses in memorial and aired a rare, apparently recent picture of Mughniyeh - showing a burly, bespectacled man with a black and gray beard wearing military camouflage and a military cap.
Syrian Interior Minister Brig. Gen. Bassam Abdul-Majid said Mughniyeh was killed Tuesday night in a car bombing in the upscale Damascus neighborhood of Kfar Sousse, the state news agency SANA reported.
Witnesses in the Syrian capital said the explosion tore apart the silver Mitsubishi Pajero, killing a passer-by and leaving only the front of the SUV intact. Security forces sealed off the area and removed the body. The Lebanese television station LBC said Mughniyeh was leaving a ceremony at an Iranian school and was approaching his car when it blew up. By Wednesday, the area had been cleared and there was no indication a car bombing had taken place.
The killing is deeply embarrassing to Syria, showing that the wanted fugitive was hiding on its soil. The United States has accused Syria, home to a number of radical Palestinian leaders, of supporting terrorism.
Iran blamed Israel for the assassination, with Foreign Ministry spokesman Mohammad Ali Hosseini calling the bombing "yet another brazen example of organized state terrorism by the Zionist regime."
In the past, when Israel has been fingered - rightly or wrongly - as responsible for attacks on targets beyond its borders, it has generally responded with impenetrable silence, for example over last September's airstrike on an as-yet undisclosed target in Syria.
This time Israel was quick to deny any role, possibly because it could pay a price for public claims.
"Israel rejects the attempt by terror groups to attribute to it any involvement in this incident. We have nothing further to add," Prime Minister Ehud Olmert's office said in a statement.
Hezbollah captured two Israeli soldiers on the border between the two countries in July 2006, sparking an Israeli incursion into south Lebanon and a 34-day war. While Hezbollah has not come forward with evidence that the soldiers are alive, Israel regards them as such until it is proved otherwise and would not want to jeopardize their return.
Mughniyeh might have been killed by a rival group and not by a Western intelligence service, said Eliezer Tsafrir, who was the Mossad's Beirut station chief in 1983 and 1984, the time of the first attacks against U.S. targets in which Mughniyeh was implicated.
"These people make a lot of internal enemies. So it doesn't necessarily have to be Israel or America," Tsafrir said.
But regardless of whether it was behind the attack, experts say Israel may benefit from a perception its Mossad spy agency has recovered its ability to hit top terror targets.
Mughniyeh was born on Dec. 7, 1962 in the south Lebanon village of Tair Debba. He joined the nascent Hezbollah in the early 1980s and formed a militant cell known as Islamic Jihad or Islamic Holy War. The cell was said to be Hezbollah's strike arm, but the group denies any link to it.
He is accused of masterminding the first major suicide bombing to target Americans: the April 1983 car bombing of the U.S. Embassy in Beirut that killed 63 people, including 17 Americans. He is also blamed for a more devastating attack six months later, when suicide attackers detonated truck bombs at the barracks of French and U.S. peacekeeping forces in Beirut, killing 59 French paratroopers and 241 American Marines.
He was indicted in the United States for the 1985 hijacking of TWA flight 847, during which Shiite militants shot Navy diver Robert Stethem, who was a passenger on the plane, and dumped his body on the tarmac of Beirut airport. The hijacking produced one of the most iconic images of pre-9/11 terrorism: a photo of the 727's pilot leaning out the cockpit window with a gunman waving a pistol in front of his face.
In the 1980s Mughniyeh was also believed to have directed a string of kidnappings of Americans and other foreigners in Lebanon. The hostages included The Associated Press's chief Mideast correspondent Terry Anderson, who was held for more than six years until his release in 1991; and CIA station chief William Buckley, who was tortured by his captors and killed in 1985.
"I can't say I'm either surprised or sad (by his death). He was not a good man - certainly, the primary actor in my kidnapping and many others," Anderson told the AP on Wednesday. "To hear that his career has finally ended is a good thing, and it's appropriate that he goes up in a car bomb."
Anderson was the last American hostage freed in a complicated deal that involved Israel's release of Lebanese prisoners, Iran's sway with the kidnappers, Syria's influence and - according to an Iranian radio broadcast - promises by the United States and Germany not to retaliate against the kidnappers.
But Edward Djerejian, who was U.S. ambassador to Syria at the time and was involved in negotiations through the Syrian government on hostage releases, said he had "no knowledge of such a deal" promising not to retaliate. "When I was in government we made no deals," he told the AP.
Giandomenico Picco, an Italian diplomat working at the time as a special assistant to U.N. Secretary-General Javier Perez de Cuellar, said he was certain but never able to confirm that the hooded man he met in the slums of Beirut to finalize the deal was Mughniyeh.
Mughniyeh's trail of terror was believed to continue into the 1990s.
Israel accused Mughniyeh of involvement in the 1992 bombing of its embassy in Buenos Aires, Argentina in which 29 people were killed.
Argentine special prosecutor Alberto Nisman also accused Mughniyeh in the 1994 bombing of a Buenos Aires Jewish center, an attack which killed 85 people. Prosecutors said Iranian officials orchestrated the attack and entrusted Hezbollah to carry it out.
The Khobar Towers bombing came two years later. Faris bin Hizam, a Saudi journalist who closely follows Islamic groups, said Mughniyeh flew to the kingdom days before the bombing and met the group that carried out the attack.
Former White House counterterrorism chief Richard Clarke said that Saudi Arabia's King Abdullah refused a personal plea from President Clinton to help capture Mugniyah in 1996, according to ABC News.
Clarke, now and ABC News consultant, said in an interview that U.S. intelligence learned that Mughniyeh was aboard a flight from Sudan that was scheduled to stop in Saudi Arabia.
"We appealed to the Saudis to grab him when the plane landed, and they refused," Clarke said. Instead, he said, "the Saudis refused to let the plane land and it continued on to Damascus."
A monitor answering the phone at the Saudi Arabian Embassy in Washington late Wednesday night said officials were not available for comment.
Mughniyeh spent his final years moving between Lebanon, Iran, Syria and Turkey, and used as many as 47 different forged passports, bin Hizam said.
His last public appearance was believed to be at the funeral of his brother Fuad, who was killed in 1994 by a booby-trapped car in Beirut. In 2006, Mughniyeh was reported to have met with Iranian President Mahmoud Ahmadinejad in Syria.
Mughniyeh's body was brought to south Beirut in the afternoon and was laid in a refrigerated coffin, wrapped in Hezbollah's yellow flag.
His father - Fayez, a south Lebanese farmer - as well as Hezbollah's deputy leader, Sheik Naim Kassem, and other Hezbollah officials received condolences at the hall from allied Lebanese politicians and representatives of militant Palestinian factions. Though bitter rivals of Hezbollah, some pro-U.S. politicians including Lebanese Prime Minister Fuad Saniora and parliamentary majority leader Saad Hariri offered written condolences.