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Source localization is a challenging issue for multisensor multitarget detection, tracking and estimation problems in wireless distributed sensor networks. In this paper, a novel source localization method, called passive source localization using power spectral analysis and decision fusion in wireless distributed sensor networks is presented. This includes an energy decay model for acoustic signals. The new method is computationally efficient and requires less bandwidth compared with current methods by making localization decisions at individual nodes and performing decision fusion at the manager node. This eliminates the requirement of sophisticated synchronization. A simulation of the proposed method is performed using different numbers of sources and sensor nodes. Simulation results confirmed the improved performance of this method under ideal and noisy conditions.