The person, who works in the legal profession and spoke only on condition of anonymity because of grand jury secrecy, told The Associated Press that Rove testified last year that he remembers specifically being told by columnist Robert Novak that Valerie Plame, the wife of a harsh Iraq war critic, worked for the CIA.
Rove testified that Novak originally called him the Tuesday before Plame's identity was revealed in July 2003 to discuss another story.
The conversation eventually turned to Plame's husband, Joseph Wilson, a former ambassador who was strongly criticizing the Bush administration's use of faulty intelligence to justify the war in Iraq, the person said.
Rove testified that Novak told him he planned to report in a weekend column that Plame had worked for the CIA, and the circumstances on how her husband traveled to Africa to check bogus claims that Iraq was trying to buy nuclear materials in Niger, according to the source.
Novak's column, citing two Bush administration officials, appeared six days later, touching off a political firestorm and leading to a federal criminal investigation into who leaked Plame's undercover identity. That probe has ensnared presidential aides and reporters in a two-year legal battle.
Rove told the grand jury that by the time Novak had called him, he believes he had similar information about Wilson's wife from another member of the news media but he could not recall which reporter had told him about it first, the person said.
When Novak inquired about Wilson's wife working for the CIA, Rove indicated he had heard something like that, according to the source's recounting of the grand jury testimony.
Rove told the grand jury that three days later, he had a phone conversation with Time magazine reporter Matt Cooper and — in an effort to discredit some of Wilson's allegations — informally told Cooper that he believed Wilson's wife worked for the CIA, though he never used her name, the source said.
An e-mail Cooper recently provided the grand jury shows Cooper reported to his magazine bosses that Rove had described Wilson's wife in a confidential conversation as someone who "apparently works" at the CIA.
Robert Luskin, Rove's attorney, said Thursday his client truthfully testified to the grand jury and expected to be exonerated.
"Karl provided all pertinent information to prosecutors a long time ago," Luskin said. "And prosecutors confirmed when he testified most recently in October 2004 that he is not a target of the investigation."
In an interview earlier Thursday with CBS Radio News Correspondent Peter Maer, Wilson continued to criticize the White House and called for Rove's dismissal.
"Now we know who was involved in the leak. I think it's now a question of character for the president. If he is in fact a man of his word he needs to do what he said he'd do and fire Mr. Rove," Wilson said.
For more of CBS News correspondent Peter Maer's interview with Joseph Wilson, click here.
Wilson also told CNN in an interview that his wife "was not a clandestine officer the day that Bob Novak blew her identity."
He clarified those remarks on Friday, saying he meant to say that his wife lost her ability to be a covert agent because of the leak, not that she had stopped working for the CIA beforehand.
His wife's "ability to do the job she's been doing for close to 20 years ceased from the minute Novak's article appeared; she ceased being a clandestine officer," he said.
Federal law prohibits government officials from divulging the identity of an undercover intelligence officer. But in order to bring charges, prosecutors must prove the official knew the officer was covert and nonetheless knowingly outed his or her identity.
Rove's conversations with Novak and Cooper took place just days after Wilson suggested in a New York Times opinion piece that some of the intelligence related to Iraq's nuclear weapons program was twisted to exaggerate the Iraqi threat.
Democrats continued this week to sharpen their attacks, accusing Rove of compromising a CIA operative's identity just to discredit the political criticism of her husband.
On Thursday, Senate Democratic leader Harry Reid of Nevada pressed for legislation to strip Rove of his clearance for classified information, which he said President Bush should have done already. Instead, Reid said, the Bush administration has attacked its critics: "This is what is known as a cover-up. This is an abuse of power."
Senate Majority Leader Bill Frist, R-Tenn., said Democrats were resorting to "partisan war chants."
Across the Capitol, Rep. Rush Holt, D-N.J., introduced legislation for an investigation that would compel senior administration officials to turn over records relating to the Plame disclosure.
Pressed to explain its statements of two years ago that Rove wasn't involved in the leak, the White House refused to do so this week.
"If I were to get into discussing this, I would be getting into discussing an investigation that continues and could be prejudging the outcome of the investigation," White House spokesman Scott McClellan said.
But in an unspoken but clear vote of confidence for Rove, Mr. Bush had his trusted advisor at this side Thursday in a walk to the presidential helicopter, reports CBS News correspondent Joie Chen.