Ahmed Saadat, head of the Popular Front for the Liberation of Palestine(PFLP), was snatched from a prison in the West Bank town of Jericho during an Israeli military operation last month.
Israel also hauled off four of Saadat's alleged accomplices in the 2001 assassination of cabinet minister Rehavam Zeevi. These four suspects will be tried in an Israeli court in Jerusalem, the Israeli justice ministry said in a statement.
Saadat will however be indicted and tried in a military court for other security offenses not related to Zeevi's assassination, the statement said.
Ehud Olmert, the acting Israeli prime minister, has vowed to see Saadat tried.
A PFLP squad shot Zeevi in a Jerusalem hotel in late 2001. The group called it revenge for Israel's assassination of Saadat's predecessor. Saadat denied involvement in the Zeevi killing.
As part of an internationally mediated deal, Yasser Arafat, the late Palestinian president, ordered the trial of Saadat and four other PFLP members. They were jailed in the West Bank town of Jericho under US and British supervision.
Israeli commandos smashed into the Jericho prison on March 14 to take the detainees into custody in an operation Israel said was ordered to prevent a possible jail-break after the foreign monitors withdrew.
Saadat has called the seizure illegal and refused to recognise Israel's jurisdiction over him.
The PFLP has Marxist roots and opposes peace talks with Israel. The group, at the forefront of aircraft hijackings in the 1960s and 1970s, is part of the umbrella Palestine Liberation Organisation.