Videos circulated online showed plain clothes officers dismantling camera equipment in a hotel room. The Al Jazeera source said the hotel was in East Jerusalem.
Prime Minister Benjamin Netanyahu's cabinet shut down the network for as long as the war in Gaza continues, on the grounds the Qatari television network threatens national security.
Al Jazeera called the move a "criminal action" and rejected the accusation the network threatened Israeli security as a "dangerous and ridiculous lie" that puts its journalists at risk.
It said that it reserved the right to "pursue every legal step".
Israel shuts down Al Jazeera offices. — Al Jazeera English (@AJEnglish) pic.twitter.com/8gLPtzOu4PMay 5, 2024
The network has been critical of Israel's military operation in Gaza, from where it has reported around the clock throughout the war.
"The incitement channel Al Jazeera will be closed in Israel," Netanyahu posted on social media following the unanimous cabinet vote.
A government statement said Israel's communications minister signed orders to "act immediately", but at least one lawmaker who supported the closure said Al Jazeera could still try to block it in court.
The measure, the statement said, will include closing Al Jazeera's offices in Israel, confiscating broadcast equipment, cutting off the channel from cable and satellite companies and blocking its websites. It did not mention Al Jazeera's Gaza operations.
There was no official comment from the Qatari government, which deferred to Al Jazeera.
Al Jazeera previously called Israeli efforts to curtail its operations an "escalation" and said in a statement in early April that it "comes as part of a series of systematic Israeli attacks to silence Al Jazeera".
It said that Israeli authorities have deliberately targeted and killed several of its journalists including Samer Abu Daqqa and Hamza AlDahdooh, both killed in Gaza during the conflict. Israel has said it does not target journalists.
Qatar established Al Jazeera in 1996 and views the network as a way to bolster its global profile.
"Al Jazeera Media Network strongly condemns and denounces this criminal act that violates human rights and the basic right to access of information," the network said in a statement. "Al Jazeera affirms its right to continue to provide news and information to its global audiences."
The UN Human Rights Office also criticised the closure.
"We regret cabinet decision to close Al Jazeera in Israel," it said on X. "A free & independent media is essential to ensuring transparency & accountability. Now, even more so given tight restrictions on reporting from Gaza. Freedom of expression is a key human right. We urge govt to overturn ban."
We regret cabinet decision to close Al Jazeera in Israel. A free & independent media is essential to ensuring transparency & accountability. Now, even more so given tight restrictions on reporting from Gaza. Freedom of expression is a key human right. We urge govt to overturn ban— UN Human Rights (@UNHumanRights) May 5, 2024
Israel's parliament last month ratified a law allowing the temporary closure in Israel of foreign broadcasters considered to be a threat to national security.
The law allows Netanyahu and his security cabinet to shut the network's offices in Israel for 45 days, a period that can be renewed, so it could stay in force until the end of July or until the end of major military operations in Gaza.
Qatar, where several Hamas political leaders are based, is trying to mediate a ceasefire and hostage release deal that could halt the Gaza war.
