We present an integrated source of polarization entangled photon pairs in the telecom regime, which is based on type II-phasematched parametric down-conversion (PDC) in a Ti-indiffused waveguide in periodically poled lithium niobate. The domain grating - consisting of an interlaced bi-periodic structure - is engineered to provide simultaneous phase-matching of two PDC processes, and enables the direct generation of non-degenerate, polarization entangled photon pairs with a brightness of B = 7 × 10(3) pairs/(s×mW×GHz). The spatial separation of the photon pairs is accomplished by a fiber-optical multiplexer facilitating a high compactness of the overall source. Visibilities exceeding 95 % and a violation of the Bell inequality with S = 2.57±0.06 could be demonstrated.