The FBI arrested 20-year-old Jonathan Xie, saying he donated to Hamas, lied on an application to enlist in the Army, and threatened supporters of Israel.
The Israeli military said it had struck “approximately 100 military targets” belonging to Hamas, the Islamist militant group which controls Gaza.
Earlier, Hamas defied Israeli calls to stop launching incendiary balloons from the Gaza Strip.
“It all depends on Hamas. If it continues (to attack), I don’t know what its fate will be,” Israeli Intelligence Minister Israel Katz said on Israel Radio.
Israeli forces opened fire on Palestinian protesters on Monday, killing more than 50 and injuring thousands more.
Gaza officials said at least 400 people were wounded by gunfire, while others were struck by rubber bullets or tear gas.
Two people were killed in the demonstrations on Friday.
The U.S. officially recognized the holy city as Israel's capital.
The current efforts to reconcile between the Palestinian Authority (PA) and Hamas will be doomed to fail just like several
The Islamist group has ruled Gaza since 2007.