Although "isolating Arafat" is the public reason given by the Israelis for crashing into his HQ, I'm pretty sure the real reason they went in was precisely for what you described: intelligence on the many terrorist groups Arafat is connected with and controls. The Israelis aren't lying, though, when they say they want to isolate him, because doing so to the extent they have will disrupt these groups -- mainly their money supply.
You can be sure Arafat is being even more closely monitored now than ever before, and now he can't use couriers to sneak messages past the Israeli perimeter. That means he has lost the most important tool he has ever had: secrecy. Any activities he directs now are subject to easy interception and analysis by Israel's excellent intelligence agencies. Using this and other methods, they will be able to quickly hunt down and eliminate large numbers of terrorists, and scare most of the rest away. The halcyon days of easy terrorism by the Arabs in Israel may finally be coming to an end.
The Israelis have reportedly seized significant quantities of documents and weapons, and probably a lot of terrorist payroll money, since Arafat has tightly controlled the purse strings of his minions in Force 17, Fatah, Tanzim, etc. Needless to say, cutting off at least part of the money supply to the terrorist groups will not make them happy, and there will be a spike in violence. However, if the Israelis continue to do what they appear to be resolved to do, these groups will start falling apart, and bribe money for informants on terrorist activities will go much farther than it already does (which is pretty far already).
It is a dangerous and winding course the Israelis must negotiate to end Arafat's reign of terror, but if they're doing what I think they're doing, they will prevail on all fronts.
Imal