Walid al-Umari was arrested on Monday as he was reporting on the latest developments in the crisis with Lebanon from a village in northern Israel, the pan-Arab television reported.
His identification papers were confiscated.
After he was released late on Monday, al-Umari, in a live telephone interview broadcast on the satellite channel, accused Israel of "interfering with Aljazeera's work".
Aljazeera has denied showing sensitive security locations that can be used by Hezbollah to pinpoint targets for an attack.
The Lebanase group has rained rockets on Israel in a tit-for-tat cycle of violence that also saw the Jewish state bomb Lebanon's infrastructure.
Scores of civilians have been killed, mostly Lebanese since Israel responded to the kidnapping of two soldiers on Wednesday by Hezbollah with relentless air strikes.
Al-Umari and his crew were reporting from Kofor Yasif village, near the northern Israeli city of Akka on the Mediterranean coast.
He was taken to a police station while the rest of the crew was told to stay in their cars.
On Sunday morning, Israeli police briefly held Elias Karam, Aljazeera's correspondent in northern Israel,near Haifa -the city that has been repeatedly hit by Hezbollah's rockets.
Al-Umari was detained by Israeli police also on Sunday night for two hours after broadcasting from Haifa.
Micky Rosenfeldm, an Israeli police spokesman, said Al-Umari, his cameraman, and an assistant were questioned on Sunday about footage they had taken after dozens of Hezbollah rockets landed on Haifa, killing eight Israelis.