Troops set charges to destroy the homes of Hussam Kawasme and Amar Abu Aysha in the southern West Bank before dawn and sealed off the home of a third suspect, Marwan Kawasme, the army said.
Israel accuses Hamas Islamist militants of the abduction and killing of Jewish seminary students Gil-Ad Shaer, Naftali Fraenkel and Eyal Yifrah, who went missing on June 12 and were discovered dead a couple of weeks later in the West Bank.
Hamas has neither confirmed nor denied the accusations.
Hussam Kawasme, a 40-year-old resident of Hebron, was arrested on July 11 but the other two suspects remained at large, the army said.
The killings set off a cycle of violence that led to a month-long offensive between Israel and militants in Hamas-dominated Gaza.
Israel carried out air strikes and a ground offensive in the enclave to counter militant rocket fire and to blow up a network of tunnels dug under the border to infiltrate the Jewish state.
The Palestinian Health Ministry in Gaza says 1,980 Palestinians, mostly civilians, have been killed in the conflict. On the Israeli side, 64 soldiers and three civilians have been killed.
A ceasefire that brought fighting to a halt is due to expire later on Monday and Egyptian-mediated talks to end the conflict are not certain to succeed, according to Palestinian delegates participating in the talks in Cairo.
Hussam Kawasme's arrest was made public for the first time earlier this month in a document from a court case over whether houses belonging to him and two other suspects should be destroyed as a punitive measure.
It said Kawasme had admitted helping to organize the kidnapping - securing funding from Hamas and buying weapons which he passed on to the two other suspects who carried out the attack.
He also helped to bury the bodies of the teenagers in a plot of land he had bought a few months earlier, it said.
The military statement said Israel's supreme court had affirmed the military's wish to demolish the homes and had rejected three appeals by the suspects' families against their destruction. (Writing by Ori Lewis; Editing by Nick Macfie)
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