A fast one step bio-synthesis for in situ preparation of silver nanoparticles is proposed. The method involves reduction of AgNO3 with an aqueous extract of peanut skin, which is a good source of polyphenols. The silver nanoparticles thus synthesized were characterized by transmission electron microscopy (TEM), X-ray diffraction (XRD), UV-Vis absorption spectroscopy, Fourier Transform infrared (FTIR) spectroscopy and magnetic measurements. Effect of low dose gamma irradiation during the synthesis was studied and their physico-chemical properties were compared with those produced without irradiation, On the contrary to the diamagnetic behavior of bulk silver, the silver nanoparticles thus prepared show a significant ferromagnetic moment component. Variable time exposure to It gamma-irradiation results in an exponential decay of ferromagnetic component. A freshly prepared solution of silver nanoparticles shows selective spectral changes towards iodide ions at trace concentration (below 50 mu M) among a series of 16 other competing anions. The prepared nanoparticles are therefore suitable for anion sensing application. (c) 2015 Elsevier B.V. All rights reserved.