The attack was part of a wave of violence that erupted in October and which has killed 201 Palestinians and 28 Israelis.
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Also Wednesday, an Israeli hospital spokeswoman said a man who was critically wounded in a Jerusalem bus bombing this week has died.
Shin Bet on Wednesday announced the arrests, which took place this month.
The military says Palestinians threw rocks and firebombs at Israeli forces during the demolition.
The Shin Bet described the Jewish terror cell as “extreme and violent, which systematically harmed Palestinians and their property, with full knowledge that human lives could be harmed, even after the result of the arson attack on a home in Duma”. Group members were connected to members of another ring of Jewish extremists recently apprehended and accused of a series of attacks on Palestinian and Christian targets, Shin Bet said.
Israeli forces demolished the home of Hassin Mohammed Hassin Abu Gosh overnight in the Qalandiyah refugee camp, as instructed by Israeli officials, the Israel Defense Forces’ Spokesperson’s Unit said in a statement.
Israeli Prime Minister Benjamin Netanyahu has ramped up demolitions of attackers’ homes in a bid to halt the unrest.
Six youths from Binyamin region in West Bank confess to having carried out attacks against Palestinians; they have reenacted several of the incidents; they are being investigated for similar offenses carried out in 2008-9.
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The January 25 attack saw Abu Ghosh, 17, and another Palestinian, Ibrahim Allan, 23, stab two women in the West Bank settlement of Beit Horon, northwest of Jerusalem.
