The alleged plot came to light last week when Brazil’s federal police carried out a series of raids across several states and arrested two suspects in Sao Paulo in an “anti-terrorism” investigation.
“A third suspect under investigation was arrested Sunday in Rio de Janeiro,” police said in a statement.
The first two suspects arrested in the case denied the accusations Friday in an initial court hearing.
Israel’s Mossad spy agency says it helped foil the alleged plot, which it claims was planned by Hezbollah and aimed at Israeli and Jewish targets in Brazil.
Iran-backed Hezbollah is allied with Hamas, the Palestinian group locked in a bloody conflict with Israel.
Several top Brazilian officials have reacted angrily to Israel’s statements on the case. Justice Minister Flavio Dino on Thursday condemned a “rush to conclusions about an ongoing investigation” for “propaganda” purposes.
Dino said the Brazilian investigation started before the current Israel-Hamas conflict erupted on October 7.
Anti-terror operations are rare in Brazil, which has never suffered a major attack.
The country is home to around 107,000 Jews, the second-biggest Jewish community in Latin America, after Argentina.
Security experts have long tracked alleged Hezbollah operations in South America’s “tri-border area” between Brazil, Argentina, and Paraguay.
All three countries are home to large populations of Lebanese origin.