Police carried out a pre-dawn raid on the Yitzhar settlement, near the Palestinian town Yasuf, where the mosque was attacked last month.
They are investigating whether there is a link between those arrested and the arson attack, police sources said.
The floor of the mosque and a stand holding copies of the Quran were burned in the December attack.
Of the 10 people arrested on suspicion of damaging Palestinian property four were minors and would be released soon, Israeli police spokesman Mickey Rosenfeld said.
The other six, who included Zvi Sukkot of Yitzhar, Eliran Elgali of Yitzhar and Shlomo Gilbert of Elon Moreh, all 20 years old, were still being questioned, he said.
He denied claims by a Yitzhar resident, reported in the Israeli media, that police beat residents, damaged property and even confiscated cameras.
Mr Rosenfeld said the only items confiscated were spikes, as sometimes used on roads to prevent entry, and the type of torches used to carry a flame.
Witnesses told local media about 100 police entered the settlement, some of whom forced their way into the Od Yosef Hai yeshiva, or Jewish seminary.
The yeshiva issued a statement accusing the authorities of persecuting its staff and students.
The head of the yeshiva, Rabbi Yitzhak Shapiro, published a book last year which, according to the Israeli media, says it is permissible for Jews to kill non-Jews if their presence "causes danger to Jews" - including children "if it is clear they will grow up to harm us".
In the December attack, graffiti was sprayed in Hebrew on the mosque wall which read: "Get ready to pay the price," Israeli public radio reported. Another read: "We will burn you all."
Some hard-line settlers say they will attack Palestinians in retaliation for any Israeli government measure they see as threatening Jewish settlements.
It is a policy they call the "price tag".
Prime Minister Benjamin Netanyahu has ordered a 10-month lull in permits for new settlement homes in the West Bank, not including East Jerusalem.
The order followed US and Palestinian calls for a total freeze in settlement building.
Palestinian officials have refused to rejoin peace talks until a total freeze is imposed.
All Jewish settlements in the West Bank, including East Jerusalem, are illegal under international law, though Israel disputes this.
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