Over 10 Israeli army vehicles on Friday surrounded Arafat's Ram Allah headquarters, where he has been confined since December 2001.
But Israeli security sources said soldiers were undertaking "a routine activity" while a Palestinian security official said he had been informed by the army it had no intention of entering the compound.
The move comes on Sunday before Purim, Judaism's most festive celebration. The Israeli army also announced late on Thursday it was closing the crossings with the occupied West Bank and Gaza Strip.
Army radio said the closure would be enforced until Tuesday.
Also in the West Bank, Israeli forces shot a Palestinian teenager in the head in the village of Jabaa near the city of Jenin during an invasion. The teenager is in serious condition, said medics.
And in the Gaza Strip, an 11-year-old boy died of wounds he sustained last month during an Israeli air strike against Islamic Jihad resistance fighters.