At least three of those arrested in the Jabiliya refugee camp, about two kilometres from the scene of the blast on Wednesday, were members of the Popular Resistance Committees, security sources said.
The bomb attack killed three US security personnel, in an unprecedented attack on a foreign target in the Palestinian territories.
The huge roadside bomb was detonated as the convoy passed into the Gaza Strip on its way to interview Palestinian students wanting to apply for scholarships to study in the United States.
The attack came just hours after the United States vetoed a draft UN Security Council resolution that would have condemned Israel’s construction of a West Bank security barrier.
The White House angrily condemned the attack, with US President George W Bush blaming the Palestinian Authority and its leader Yasser Arafat for failing to reign in militants.
President Bush warned that such attacks are an obstacle to a Palestinian state.
“I condemn in the strongest terms the vicious act of terrorism,” he said in a statement.
“The failure to create effective Palestinian security forces dedicated to fighting terror continues to cost lives.”
Palestinian leader Yasser Arafat condemned the attack and offered his condolences to Mr Bush.
“I strongly condemn this crime which targeted Americans observers who came on a mission of peace and security,” he said in a statement.
The sentiment was echoed b y new Palestinian Prime Minister Ahmed Qorei, who contacted US Secretary of State Colin Powell to offer condolences and his cooperation in catching the bombers.
The radical movements Islamic Jihad and Hamas, which have been behind hundreds of deadly attacks on Israeli targets during the Palestinian intifada, both denied any involvement. No foreign targets have previously been attacked during the three-year uprising.
But the Israeli Foreign Minister Silvan Shalom claimed the attack is evidence that the Palestinian Authority is “covering for terror organisations”.
The State Department has advised US citizens to leave Gaza in the wake of the blast.