The government press office distributed video of an interview last year in which the journalist, Elias Karram, called his work an "integral part" of Palestinian resistance to Israel's occupation.
A hearing would be held in which Karram would be asked to explain his comments, the press office said, adding it had "decided to revoke" his credentials pending the hearing.
"These remarks call into question the ability of Karram, the representative of a foreign network, to cover -- as a professional journalist -- the Israeli-Palestinian conflict in which, according to his own words, he is taking an active part," it said in a statement.
Israeli Prime Minister Benjamin Netanyahu said last month that he wants to expel the Qatari broadcaster from the country, accusing it of inciting violence.
Netanyahu made the comments as tensions soared over Jerusalem's Haram al-Sharif mosque compound, known to Jews as the Temple Mount.
At the time, Al-Jazeera condemned what it called "arbitrary accusations and hostile statements".
It added the network would "take all necessary legal measures in case they act on their threat," saying its coverage was professional and objective.
On August 6, Communications Minister Ayoob Kara followed up on Netanyahu's comments by saying he would take steps to close Al-Jazeera's offices in Israel.
Kara was referring to two policemen who were killed in a July 14 attack near the Haram al-Sharif compound in east Jerusalem.
The press office's move to revoke the press card for Karram, a 40-year-old Arab Israeli, marks the first concrete actions against the broadcaster since Netanyahu's remarks.
The press office statement today said Kara recently requested that "the press cards of Al-Jazeera personnel in Israel be revoked on the grounds that the network was inciting and agitating to violence in a way that harmed the security of the state."
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