Members of the Emergency Response Unit (ERU) searched the property in Clondalkin before midnight last night as part of an ongoing operation targeting organised crime in Dublin.
During the raid a handgun was recovered and two men, aged 26 and 39, were arrested.
They are currently being held at Clondalkin Garda Station in relation to the gun bust.
Sources have told Independent.ie that they believe the two men were on the way to commit a shooting, but the identity of the target was unclear last night.
A senior source last night described the arrest of the 39-year-old, regarded as one of the most dangerous criminals working for the cartel, as highly significant.
“It is a major result for Gardai following a lengthy intelligence operation and there is not doubt that a hit was due to take place when the ERU entered the property.
“Indications at this early stage are that it is linked to the Hutch/Kinahan feud which has not gone away despite quietening down over the past year.
“A specific target has not yet been identified but there are a number of Hutch associates who remain under threat,” a source said.
Gardai had received intelligence in recent weeks that a 39-year-old gun-for-hire had returned to Ireland and was expected to carry out an assassination attempt.
When they raided a property, described as a “safe house” in the Woodford area of Clondalkin they discovered the major criminal at the back of the house with the loaded handgun.
An associate of this man, a 26-year-old from Finglas was also in the house at the time. He has links to a crime gang in north west Dublin led by the drug dealer known as ‘Mr Flashy’ and has previously been jailed over a high-profile violent incident.
The hitman for hire arrested on Friday night fled the country over three years ago after he was arrested by detectives investigating the feud murder of Eddie Hutch.
He is also wanted for warrants for crimes not linked to the feud and his return despite being a wanted high-profile criminal has left investigators surprised.
They are being held under Section 30 of the Offences Against the State Act and can be held for up to three days.
Assistant Commissioner John O’Driscoll of Special Crime Operations said today: “This is yet another successful intervention by the Garda Síochána in a potential threat to life incident, involving the seizure of a loaded firearm and the arrest of suspects”.