The Palestinian militant group the al-Aqsa Martyrs' Brigade has threatened to resume attacks against Israel following the detention of nearly 20 of its members.
Many of the men had been in the compound for months
The militants were seized on Saturday by Yasser Arafat's security forces at the Palestinian leader's headquarters in Ramallah.
The fate of the detainees is currently the subject of negotiations between Palestinian security forces and the Israeli military, a Palestinian minister told the BBC.
Israel believes the men - who have spent several months holed up in the Muqata compound - have carried out attacks against Israelis and wants them jailed.
Since the peace plan known as the roadmap was unveiled, the Palestinian authorities have been under intense pressure to tackle militant groups, the BBC's Damian Grammaticas reports from Ramallah.
'Sold us out'
In a statement following the arrests, al-Aqsa vowed to resume attacks - "in particular suicide operations" - to avenge the "Americo-Zionist decision to arrest the activists".
Earlier reports said that some of the detainees were to be transferred to a Palestinian prison under foreign supervision in Jericho as part of a deal brokered by the US, however it is not clear if this is still to go ahead.
Meanwhile, the men are believed to be confined to a room inside Mr Arafat's compound awaiting a move.
Arafat [left] has been sidelined by the US and Israel
The militants are said to be opposed to a move to Jericho.
"Arafat sold us out," one of the detainees told Reuters news agency in a phone call.
"We are very disappointed that he has yielded to the conspiracies of the Zionists and Americans."
The al-Aqsa group has been behind a number of attacks since 29 June, when the main militant groups signed a truce.
Palestinian leaders, including Prime Minister Mahmoud Abbas, also known as Abu Mazen, have come under increasing pressure from Israel and the US to crack down on "the infrastructure of terror".
Abu Mazen has also been urged to press ahead with the internationally-backed roadmap.
He is the US and Israel's chief interlocutor - the two countries refuse to deal with Mr Arafat, accusing him of supporting attacks on Israelis.
The veteran Palestinian leader has been confined to his headquarters for most of the time since the current intifada began in September 2000.