The Church of the Multiplication of the Loaves and Fishes on the Sea of Galilee was attacked on Thursday when a group of Israeli minors set fire to parts of the ancient church.
Christians believe Jesus performed the miracle of feeding 5,000 people with a few loaves of bread and fish inside the church. which was also spray-painted in red with Hebrew graffiti on the walls of the church, citing a verse from a prayer denouncing the worship of "false gods."
Sixteen Jewish minors from illegal settlements in the West Bank were arrested on suspicion of taking part in the arson attack, Israeli police told Al Jazeera.
The Israeli newspaper, Yedioth Ahronoth, reported that they were students at the Porat Yosef yeshiva, a religious college in Jerusalem, and had been hiking in the area when officers stopped them.
Attacks on Christian and Islamic holy sites have increased significantly over the past few years, according to Al Jazeera's Nisreen El-Shamayleh, reporting from West Jerusalem.
Extensive damage was inflicted on the church’s book shop and other buildings at the complex but did not destroy the fifth Century mosaic floors which are its key archaeological feature.
Two people who had been staying at the complex were taken to hospital for immediate medical attention after suffering from smoke inhalation.
BBC correspondent Kevin Connolly said the graffiti will suggest to many that the attack is part of a sporadic campaign by a small group of far-right Jewish extremists against non-Jewish targets in Israel, but police said it was too early to tell.
"The torching of the church is a cowardly and despicable act which contradicts Israel's basic values," Internal Security Minister Gilad Erdan said in a statement.
The Israeli pressure group, Rabbis for Human Rights, says there have been 43 hate crime attacks on churches, mosques and monasteries in Israel and the occupied West Bank since 2009, the Reuters news agency reported.