The investigation was sparked by the beating of a Turkish citizen who owns a kebab restaraunt near Venice.
The five suspects, all Turkish citizens of Kurdish ethnicity, are under investigation for conspiring with the intent of extortion and causing serious injury, with the aggravating circumstance of terrorism aims, a police statement said.
Authorities also ordered the search of eight residences.
The Italian Embassy in Ankara confirmed that arrest and search warrants had been issued and that the Venice Police Department issued them on Tuesday morning for five suspects and eight residences in close cooperation with the police departments of Rome, Modena, Padova, Udine and Pesaro.
A statement released by the embassy on Tuesday said the investigation, conducted in coordination with the Venice Prosecutor's Office, was expected to soon shed light on political implications of the incident and reveal a broad range of activities related to extortion. The statement also underlined that the Venice police's actions on Tuesday was a fatal blow to the PKK's mechanism for collecting money. It added that the arrests show money collected from foreigners of Kurdish descent through extortion is an indispensable source of financial support for terrorist activities along the Turkish-Iraq border.
The PKK took up arms in 1984 with the aim of gaining autonomy in Turkey's mainly Kurdish Southeast. It is considered a terrorist organization by Turkey, the European Union and the United States.