Israeli undercover troops kidnapped two Palestinian brothers from their home in the village of Kufr al-Labad near the West Bank town of Tulkarm.
The men were identified as Samer Kayed, a Palestinian policeman, and his brother Samir, a university student.
Israeli security sources said one of the men is a member of the militant Hamas group, which has been responsible for a series of suicide attacks against Israelis.
An army spokesman said weapons and other "military equipment" were found in the home.
Israeli officials recently announced the military would use "guerrilla warfare tactics" to seize militants, instead of launching large scale incursions into Palestinian areas.
The Israeli army, however, has decided to keep tanks and troops in the Palestinian-ruled town of Jenin. The army said there are concrete warnings that militants in Jenin are planning terrorist attacks against Israel.
Troops raided six West Bank towns last month, following the assassination of an Israeli Cabinet minister. Soldiers have since left five of the towns, but remain in Jenin.
The United States and other countries have repeatedly called on Israel to withdraw from all territory under Palestinian control.
Israel's defense ministry confirmed Wednesday that mobile homes used by Jewish settlers in the volatile West Bank city of Hebron will be replaced by permanent housing.
The trailers, which are located in the center of the divided city, have frequently come under fire during more than 13 months of Israeli-Palestinian violence.
The decision was announced after U.S. Secretary of State Colin Powell, in a major policy address, said Jewish settlements in the West Bank and Gaza are undermining chances for peace. Mr. Powell said all settlement activity must stop.
Mr. Powell's speech earlier this week was the first time the Bush administration has outlined ideas in a major policy address for ending the conflict.
Mr. Powell is sending two U.S. mediators, State Department envoy William Burns and retired Marine Corps General Anthony Zinni to work with Israel and the Palestinians to support a cease-fire and return to peace negotiations.
Israeli Prime Minister Ariel Sharon is insisting on a week-long period of complete calm before talks can be renewed, a demand the Palestinians have rejected.