Understood source of interest in diplomacy (5)
I believe the answer is:
tacit
'understood' is the definition.
(thesaurus)
'source of interest in diplomacy' is the wordplay.
'source of' indicates taking the first letters.
'in' is an insertion indicator.
'diplomacy' becomes 'tact' (I've seen this before).
The initial letter of 'interest' is 'i'.
'i' placed into 'tact' is 'TACIT'.
(Other definitions for tacit that I've seen before include "Implied without being stated" , "Implied or understood, not put into words" , "Implied, unstated" , "Aircraft engine casing" , "Implied without being put into words" .)