JERUSALEM (Reuters) - Israel's defense minister said on Monday that a Lebanese-Canadian man arrested in Cyprus after authorities found almost two tonnes of ammonium nitrate in his basement was part of a Hezbollah bomb plot.

Minister Moshe Yaalon said he was citing information he had received from authorities in Nicosia.

Cypriot media had reported a possible connection between the 26-year-old suspect, who arrived in May and was staying in the coastal town of Larnaca, and Hezbollah, an Iranian-backed Lebanese militia opposed to Israel.

After the arrest on Wednesday, police declined comment on the case beyond saying they were investigating all possibilities. They could not be reached for comment on Monday.

Speaking to reporters, Israeli Defence Minister Moshe Yaalon described the suspect's apartment as "a hideout, which according to what to what they (Cypriot authorities) are saying was being used by Hezbollah's international terrorism network".

Further citing what Israel had been told by Cyprus, Yaalon said the ammonium nitrate was intended for manufacturing bombs.

"These were apparently meant to be ready for attacks on us," he said, referring to Israelis or Jews in Cyprus or elsewhere in Europe. He added that the explosives might also been intended for attacks against Western targets.

Cyprus is a popular holiday destination for Israelis. The island is in the EU, hosts two British military bases and receives intelligence from Western agencies. But Cyprus has little militant-related activity despite its proximity to the Middle East.

Its last major security incident was a botched attack on the Israeli embassy in 1988, which killed three people.

In 2013 a Swedish citizen of Lebanese descent was jailed in Cyprus on charges of plotting to attack Israeli tourists.

(Writing by Dan Williams; Editing by Angus MacSwan)