The explosion that occurs is precisely from the Iranian missile. The impact is kinetic because the Arrow 3 does not carry a warhead.
I read here that the Arrow 3 maintains the 150 kg fragmentation warhead.
Just as a curiosity, the ballistic missile interceptor missiles according to their method of action:
PAC-1/2: 90 kg fragmentation warhead
PAC-3: 40 kg hit to kill
SM-2 Block IV: 75 kg fragmentation warhead
SM-6: 75 kg fragmentation warhead
THAAD: no hit to kill warhead
SM-3: no hit-to-kill warhead
GBI: no hit to kill warhead
Arrow I and II: 150 kg fragmentation warhead
Arrow III: hit to kill (but retains 150 kg fragmentation warhead)
48N6 (S300): 150 kg fragmentation warhead
9M82/83 (S300V): 150 kg fragmentation warhead
9M96 (S400): hit to kill 24 kg warhead
53T6 (A135): 10 Kt nuclear