JERUSALEM — Israel’s Supreme Court on Sunday ordered a West Bank settlers’ outpost built on private Palestinian land to be dismantled by Aug. 1, rejecting a government compromise with the settlers that would have allowed them to stay put for another three years.

The decision was much anticipated, because the panel of three judges who decided the case included the court’s conservative new chief justice, Asher Grunis, and because the case involved the politically explosive issue of moving settlers in the face of potentially violent resistance.

Whether the government will remove the 50 families living in the outpost before the deadline will also be closely monitored.

In their ruling, the judges chided the government for having failed to evacuate the outpost in accordance with an earlier high court decision.

“This is a necessary component of the rule of law to which all are subject as part of Israel’s values as a Jewish and democratic state,” the decision said.

The case concerns Migron, a settler outpost near the West Bank city of Ramallah. Migron is one of the largest of dozens of small enclaves that have a different status under Israeli law than the 120 full-blown settlements in the West Bank.

Although the larger settlements, home to about 330,000 Israeli Jews, are considered in violation of international law by a vast majority of foreign governments, Israel views them as legitimate; not so for the smaller outposts, which Israel views as illegal because they went up without its authorization. Despite that status, most of the outposts have been provided with basic infrastructure by the government.

Nearly a decade ago, Israel promised the United States that it would dismantle a number of the outposts in preparation for a two-state solution to the Israeli-Palestinian conflict. The Palestinians want to build a state on land that is now partly occupied by the settlers. But almost no outposts have actually come down, and Israeli-Palestinian negotiations are frozen.

Meanwhile, Migron stands out among the outposts because its land is not simply part of a theoretical future state of Palestine but also because it has been shown to belong to private Palestinian owners. The state did not dispute that finding, although the settlers say that no proof of ownership was provided.

Palestinians represented by an Israeli lawyer took the case to the Supreme Court, along with Peace Now, a left-wing Israeli group that opposes the settlements. The case dragged on for years, but last summer the court said the outpost had to be dismantled by the end of March 2012, a deadline the new ruling extends to Aug. 1.

The government of Prime Minister Benjamin Netanyahu, which is a strong defender of the settlers and wanted to avoid a confrontation, suggested a compromise — let the residents of Migron remain until a new authorized community could be built nearby where they could relocate upon its completion in 2015.

The plaintiffs returned to the court last week and told the court that to accept such a deal would be to flout the rule of law.

One of the three justices who heard last week’s arguments, Salim Joubran, indicated the court’s leanings at the time: “You say the outpost will move in three years, but I know this type of behavior. Three years will inevitably turn into eight.”

Right-wing legislators said Sunday that they would introduce legislation to legalize Migron and other outposts. Dani Dayan, a leader of Israel’s settler movement, said that the court’s ruling would empower the violent extremists in his community who have long argued that there was no point in seeking compromise.

Tzaly Reshef, a founder of Peace Now and a lawyer, said the decision would not change the fact that “supporters of the settlements remain in power.” But he called it “very meaningful in terms of the constitutional system in Israel.”

Mr. Reshef said that had the case been decided the other way, “it would have been almost the end of the existence of the courts as the protectors of the rule of law in this country, as well as the ultimate victory of the settlers.”

He continued, “The government, threatened with violence if it tries to remove settlers, tried to convince the court that it should pull back from its decision, which is based on the basic right of ownership of private property.”

The next test, Mr. Reshef said, would be whether the government is “able to change facts on the ground.”

Mr. Netanyahu said the government would honor the court’s decision and uphold the rule of law.