Abu Arafeh was detained at a checkpoint at the entrance to al-Azaria, a suburb of east Jerusalem which is technically part of the occupied West Bank.
The sources said Abu Arafeh, one of the 24 ministers in the Hamas-led cabinet, which was sworn in last week, had been travelling to al-Azaria to inaugurate new political offices.
A spokesman for the Jerusalem police could not immediately confirm the arrest. “We are seeking verification,” he told AFP.