An Israeli special unit, backed by 12 armoured vehicles, surrounded Sami Dharaghma's home in the town of Tobaas, reported Aljazeera's correspondent on Thursday.
Dharaghma, a member of the Islamic Jihad, has been wanted for the past three years.
Another Islamic Jihad activist, Ahmad Fawzi al-Saadi, was shot by Israeli soldiers as they arrested him in the occupied West Bank city of Jenin.
The Islamic Jihad has carried out attacks against Israel since the start of the al-Aqsa Intifada in September 2000.
Late on Wednesday occupation troops invaded the West Bank cities of Nablus and Bethlehem and detained 11 Palestinians. It was unclear whether they were resistance fighters or civilians.
Also on Thursday Israeli soldiers demolished two Palestinian homes in the occupied Gaza Strip town of Abu al-Ain, reported correspondent Ali al-Samudi.
Troops sealed off the Holi and Matahin crossings south of Dair al-Balah in Gaza, according to Palestinian security sources. The crossings link the southern and northern parts of Gaza.