Ahmed Abu Atoun had fled to the Red Cross compound last year after Israel ordered him expelled from the city. Police spokesman Micky Rosenfeld said that when Abu Atoun stepped out of the building, plainclothes officers grabbed him. Israel Radio reported that the police were disguised as Arabs.
Abu Atoun was among four politicians Israel arrested in 2006 for their connections to Hamas, an Islamic militant group that Israel considers a terrorist organization.
After spending time in jail, they were all ordered to leave the city. They sought shelter at the Red Cross to avoid expulsion.
One of the other men in hiding, former Cabinet minister Khaled Abu Arafa, told a Gazan radio station that Israeli police arrested Abu Atoun in a tent on the Red Cross lawn.
Red Cross spokeswoman Cecilia Goin said the Hamas politicians often receive visitors in the tent. She confirmed Abu Atoun was arrested, but said the Red Cross was still investigating the circumstances.
Abu Atoun is the second member of the group to be arrested. Another lawmaker, Mohammed Abu Teir, was taken into custody earlier this month after venturing out of the compound.
Meanwhile, an Israeli court has ordered the government to pay $432,000 to the family of a prominent Palestinian peace activist whose 10-year-old daughter was killed by an Israeli rubber bullet in 2007.
Abir Aramin was standing at a distance from stone-throwing demonstrators in the village of Anata, north of Jerusalem, when Israeli forces fired rubber-coated steel bullets to disperse the protest. One hit Abir, and she died of her wounds two days later.
Her father, Basam Aramin, co-founded Combatants for Peace, a group of former Israeli and Palestinian fighters who now promote peaceful coexistence.
Originally, police claimed a rock killed the girl. But an Israeli human rights organization pressed for an autopsy, which ended up showing she was hit by a bullet.
