Bassam al-Salhi, who is running for the People's Party (formerly the Communist party) in the 9 January election, was detained at al-Ram checkpoint near Jerusalem on Friday after being refused permission to enter the city.
Israeli police scuffled with al-Salhi's aides when they tried to pull him free.
A police statement said al-Salhi was denied entry into Jerusalem for not having a permit adding that al-Salhi instigated the violence.
Al-Salhi denied assaulting Israeli policemen. "They were arresting me and I only tried to resist being arrested," he said.
He said he went to hospital for treatment to fractures to his hand he feared he sustained in the scuffle.
Al-Salhi said he did not have a permit, but had hoped police would let him pass in a goodwill gesture to allow greater freedom of movement for presidential candidates to promote their campaign.
Israeli troops arrested al-Salhi
at a checkpoint on Friday
A statement from his party said al-Salhi had been attacked and beaten by the Israeli security services.
The People's Party said al-Salhi had planned to address supporters in Arab East Jerusalem, occupied and annexed by Israel after the 1967 Six Day War.
Israel has been under heavy international pressure to enable free and fair elections to take place in all parts of the occupied Palestinian territories, including east Jerusalem.
While it has agreed to allow residents to vote by postal ballot in a repeat of the process seen in the last election in 1996, candidates are unable to travel at will in and outside the city.
Earlier in the week, human-rights activist and presidential candidate Mustafa al-Barghuthi accused Israeli soldiers of beating him at a checkpoint near the northern West Bank town of Jenin.