The agency said Mohammed Nazal, 33, from the northern West Bank town of Qabatiya, was arrested in January at the Allenby crossing between Jordan and the occupied West Bank.
Nazal, who had been in Cairo as a student since 2007, was a member of Al-Mujaheddin brigades which Shin Bet described as an "extremist Islamist terror group" whose members have fired rockets at Israel and attempted other attacks.
Nazal told investigators that "while in Egypt, he sought out and recruited students from the West Bank studying in Egypt, sent them for military training in Gaza, and then planted them in the West Bank" to set up a military network, a Shin Bet statement read.
His Cairo apartment was also a meeting place for militants from various groups, including the Islamist movement Hamas which controls the Gaza Strip, the agency said.
It said Nazal's group and Hamas had ties that included training and the supply of arms, and in Gaza Al-Mujaheddin brigades came under the auspices of Hamas which funds and guides it.
Nazal will be tried in a military court, the statement read.
The Shin Bet announcement shortly after Cairo accused Hamas of involvement alongside the outlawed Muslim Brotherhood in last year's killing of Egypt's top prosecutor Hisham Barakat, a charge Hamas swiftly denied.