The IDF is alarmed by the increase in clashes in the West Bank between Palestinian villagers and settlers in nearby outposts and by the growing harassment of senior army officers and civil servants by right-wing extremists.

The commanders are concerned that the situation may deteriorate even further with the diplomatic crisis looming in September when Palestinians make their bid for UN recognition.

Last week settlers burned a Palestinian field in the West Bank village of Burin, destroying more than 400 trees, after two Palestinians had stolen a car belonging to a settler from the nearby Yitzhar settlement.

Police arrested a number of suspects - the arson was video-taped from a distance by a Palestinian B'Tselem activist. But the court released the suspects for lack of evidence.

On the same day, Yitzhar's secretariat sent a threatening letter to the mayor of the nearby village of Hawara, issuing a 24-hour ultimatum to return the stolen car and turn in the thieves. Otherwise, the letter warned, "it will be impossible to stop the residents' rage."

On Sunday Yitzhar settlers and Palestinian villagers from Asira a-Kabaliya were involved in fighting and stone-throwing after a field fire. Palestinians reported one resident was injured and had to be taken to hospital.

In the recently established settlement Gaon Hayarden, east of Ramallah, Palestinians threw stones at settlers on Saturday, breaking one settler's leg, in one of several Palestinian attacks on the settlers.

On June 7 the mosque in al-Mueir village was set on fire - the fourth mosque arson in a year and a half. The arsonists painted "price tag" on the mosque wall. Police believe the act was the settlers' response to the Israel Lands Administration's decision to evacuate structures in a nearbly illegal outpost.

Meanwhile, the defense establishment is planning moves that are likely to heat up the atmosphere even further. The state has pledged to the High Court of Justice to evacuate three buildings in the illegal Migron outpost by July 24. By July 20 outgoing Justice Ayala Procaccia is due to hand down the verdict in the case of a petition to tear down nine structures in the Ofra settlement.

The state has also promised to remove settlers' facilities set up illegally on private Palestinian lands in three locations by the end of August.

The IDF fears Palestinians may open fire at one or more of the outposts.

At the same time, the settlers have stepped up their campaigns against civil servants and IDF officers, including harassing some of them.

In addition to demonstrations against Deputy State Prosecutor Shai Nitzan and protests against the arrest and questioning of Rabbi Dov Lior of Kiryat Arba, the settlers are conducting an ongoing campaign against the IDF West Bank commander, Brig.Gen. Nitzan Alon, and against Col. Saar Tzur, commander of an Israeli military brigade in the West Bank.

In another development, the Jerusalem municipality yesterday approved a plan to build hundreds of new homes for Jews in Gilo, a neighborhood built over the Green Line in South Jerusalem, a council member said.

Elisha Peleg told Reuters that Jerusalem city planning commission had approved building plans for 900 new units in Gilo.

Palestinians say the enclaves could deny them a viable state.

"I see no difference between Gilo and any other neighbourhood in Jerusalem. Jews have the right to build anywhere in the city," said Peleg, a member of the planning commission.