The operation targeting the station's Ramallah offices was the latest attempt to silence Palestinian broadcasters Israel believes are fuelling a five-month wave of violence.
The Shin Bet charged that the channel "broadcasts on behalf of the Islamic Jihad" militant group and said it had closed it in a joint operation with the army.
"The channel served the Islamic Jihad as a central means to incite the West Bank population, calling for terror attacks against Israel and its citizens. Incitement was broadcast on the television station as well as the Internet," it said in a statement.
Cameraman Mohammed Amr and technician Shabib Shabib were also arrested, the Palestinian Journalists Union said.
An army spokeswoman said technical equipment and transmitters were confiscated from the Ramallah offices, which were ordered shut.
The channel continues to broadcast from the Hamas- controlled Gaza Strip.
Islamic Jihad denounced the "Israeli aggression against the nationalist media of the resistance," calling the raid "another episode in the long saga of oppression by the occupation."
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