More than 65 Palestinians were detained, including 51 who were part of a group of 1,027 prisoners swap.
This is a response to the inauguration of a Palestinian unity government backed by Hamas Islamists.
Naftali Bennett wrote to the PM, saying Israel should extend its sovereign territory.
Arafat died in a French hospital in November 2004 after suffering from vomiting and stomach pains.
Avigdor Lieberman was charged with fraud and breach of trust for giving an Israeli diplomat a post.
US Secretary of State John Kerry has given the two sides nine months to work out their differences.