An escalating stand-off between the Israeli Army and a group of extremist Jewish settlers encamped illegally in a Palestinian town took a sinister turn today after radicals desecrated a Muslim cemetery and mosque and attacked soldiers.

Israel's military, which is trying to force the settlers to leave the property in Hebron, said it had removed the graffiti "Muhammad is a pig" from a local mosque and had cleared the cemetery, in which gravestones were sprayed by radicals with Stars of David.

The wave of vandalism is part of a campaign of violence and disorder by nine settler families, who make up some of the most extreme hard-right-wingers in Israel.

They have promised to use force against local Palestinian residents and soldiers trying to enforce an Israeli court order demanding their departure from a house they have occupied in the town, which is densely populated by Palestinians.

The settlers believe they have a biblical right to settle anywhere in the West Bank, and bitterly oppose Israel's negotiations to give up large swaths of the occupied territory in exchange for a Palestinian state and a permanent peace settlement. Currently, about 500 settlers live in guarded enclaves in Hebron's city centre among 170,000 Palestinians.

The Israeli Army stepped back from its original plan to forcibly evacuate the settlers yesterday, fearing extreme violence. Instead, Ehud Barak, the Defence Minister, has pledged to force their removal within 30 days.

Amid a wave of vandalism perpetrated by settlers yesterday in the aftermath of the court decision, a group of men was seen gathering near a mosque, daubing abusive graffiti on it.

Mouatassem Daana, a Palestinian resident, said that he saw settlers gathered near the mosque building “writing demeaning graffiti on the wall of the mosque insulting the Prophet Muhammad” and breaking windows. Later, the cemetery was also vandalised.

As the army tried to stop settlers attacking Palestinians, the military said that one soldier was wounded after a settler sprayed turpentine on him. Activists were also said to have punctured the tyres of police and military vehicles stationed nearby.

With the prospect of a violent clash looming, the Israeli Government and army reiterated that they would enforce the court decision to evict the settlers "word for word".

After a meeting with security officials, Public Security Minister Avi Dichter said that the rule of law in Israel was "not just advice, but a mission that must be implemented fully."

"This message must get to every police and security officer," he added.

Hebron’s Palestinian governor, Hussein al-Araj, urged Israeli authorities to halt the settler violence and carry out the court decision.

“What happened is unacceptable,” he said. “The Israelis have to enforce the law and stop the suffering of the Palestinians who are living next to settlers. They have to take the settlers from this house and protect the Palestinians.”