Israel named a special task force to investigate last week's blaze in the Israeli Arab village of Tuba-Zangariya, amid fears it may exacerbate tensions with Palestinians.
The "Price-Taggers", also blamed for other assaults on mosques, have said they want to avenge the killing of settlers, and protest against Israeli efforts to remove unauthorised settlement outposts built on land Palestinians want for a state.
The violence has coincided with rising tensions over a Palestinian application for statehood on West Bank land Israel captured in a 1967 war, filed at the United Nations Security Council last month, despite Israeli and U.S. objections.
The suspect, an Israeli male, would be remanded in a court in the Tel Aviv area on Monday morning, said police spokesman Micky Rosenfeld.
Another Israeli, a West Bank settler, 18, was due in court again after his arrest late last week, Rosenfeld said.
Both "are suspected of direct involvement in the incident," Rosenfeld said.
Israeli leaders have condemned the arson and President Shimon Peres denounced the attacks as "un-Jewish."