Jewish organisations and Israeli media said the arrest was likely to boost conspiracy theories and cause a rise in anti-Semitic attacks in the US.
Far-right groups claimed vindication that attacks previously blamed on rightwingers and alleged hatred resulting from Trump's election may actually have been carried out by a young Jewish American Israeli.
Jewish organisations and Israeli media said the arrest was likely to boost conspiracy theories, while others worried it would weaken responses to a rise in anti-Semitic attacks in the US.
More details emerged Friday about the suspect, who holds dual Israeli American citizenship, though identifying details are subject to a gag order.
He was arrested Thursday in Israel and accused of making dozens of anti-Semitic bomb threats in the United States and elsewhere, including one against a major airline.
His lawyer said he is 18 and suffers a brain tumour that may cloud his judgement.
His health prevented him attending public school or doing mandatory military service, she said.
Over the past two to three years, Israeli police said he carried out a series of hoax threats from his family home in southern Israel.
In February 2015, he is alleged to have made a bomb threat against Delta Airlines, forcing a plane to carry out an emergency landing.
"In a short time, a large number of Jews are going to be slaughtered. Their heads are going to be blown off," one of the threats read, according to a recording obtained by the Jewish Telegraphic Agency.
Israel's Haaretz newspaper said Friday the net started to tighten after a threat in New Zealand in 2016, with police identifying the IP address as originating from Israel.
Using an antenna, the suspect allegedly accessed other people's computers to commit the crimes, the newspaper said, leading police to question a number of innocent suspects before eventually netting him.
His alleged motive remains unknown.
His father has also been arrested, with their next court hearing set for March 30.
The discussion Friday turned to the impact of the arrests, with Trump's response to anti-Semitism at the forefront.
More than 150 threats have been carried out against Jewish institutions in America since the start of the year. At some locations swastikas were scrawled on walls and cemeteries desecrated.
It is not known what percentage of the threats the teenager is alleged to have been involved with.
Trump received significant criticism from Jewish Americans for his perceived slow response to the uptick.
He even suggested some of the threats might be false to discredit his movement.
He later explicitly condemned anti-Semitic threats.
Trump-supporting far-right websites hailed the arrest in Israel as well as a hoax case in the United States, where the FBI in early March arrested a former journalist suspected of making bomb threats to Jewish community centres and institutions.
He was allegedly cyberstalking an ex-girlfriend, using her name to make the threats.
The Daily Stormer, a prominent anti-Semitic website that had long alleged such threats were a Jewish plot, has claimed vindication.
Alt-right website Breitbart News, formerly run by Trump's chief strategist Steve Bannon, also saw vindication, but for Trump.
"When the president suggested that some of the anti-Semitic hate crimes could be hoaxes, the (leftwing) Huffington Post claimed he was echoing 'white nationalists and far-right conspiracy theorists,'" it wrote.
"However, the arrests thus far suggest that most of the threats were indeed hoaxes."
"The US Jewish leadership owes @POTUS an apology," Marc Zell, vice-president of Republicans Overseas, tweeted.
US Jewish organisations have tried to downplay the political fallout, saying the arrest did not end legitimate fears.
"No arrests have been made in three cemetery desecrations or a series of other anti-Semitic incidents involving swastika graffiti and hate fliers," the Anti-Defamation League's CEO Jonathan Greenblatt said in a statement.
But Malcolm Hoenlein, executive vice president of the Conference of Presidents of Major Jewish Organisations, told The Jerusalem Post the arrest in Israel posed a risk "that people won't take the ongoing concerns seriously".
In the Jewish state, newspapers and officials were shocked by the arrest.
"The outcome of this young man’s actions is that the classic anti-Semitic conspiracy theory will be given a tailwind -- the Jews portray themselves as victims but are orchestrating the supposed attacks," an article in Israel's Yediot Aharonot newspaper said.
A representative of a major global Jewish organisation, who did not want to be named, told AFP that Trump's false flag claim would gain traction saying,"Those sort of statements that everyone thought were totally outlandish at the time now sound somewhat more reasonable."