YASUF, WEST BANK -- Residents of this Palestinian village say they are accustomed to fights with the Israeli settlers around them, but a week ago came an insult that opened a deeper vein: On the way to morning prayers, villagers caught the smell of smoke from their main mosque.

The alleged arson Dec. 11 blackened the building's interior and destroyed dozens of Korans and the wooden pulpit. The mosque was also defaced with Hebrew graffiti, indicating that the vandalism was part of the "price tag" strategy used by militant Israeli settlers who have vowed that any government attempt to restrict their use of land in the occupied West Bank -- such as a recently announced moratorium on some construction -- will trigger reprisals against Palestinians.

Those who burned the mosque "are extremists and Arab-haters, fundamentalists," Abdul Fathi Madi, head of religious affairs for the West Bank area that includes Yasuf, said as workers repainted the building and hauled in new carpet.

Concern about religious extremism is never far below the surface on either side of the Israeli-Palestinian conflict. Israeli leaders regard Palestinian incitement -- from disavowals of Jewish history to the animal characters that the militant Hamas group uses in its children's television programs to voice the need to "slaughter" Jews -- as a key barrier to a peace agreement. Palestinians argue that attacks such as the one in Yasuf or the recent burning of a farmer's supply house in nearby Ein Aboun are meant to keep the West Bank in Jewish hands.

But in the case of the mosque fire, Israeli leaders condemned the attack and promised an aggressive investigation. The country's chief rabbi likened the incident to the destruction of German synagogues before the Holocaust, a rare evocation of the Nazi mass killings by an Israeli in relation to the Palestinians, whom Israel more often accuses of diminishing the tragedy.

The attack also came at a tense time in Israel's internal debate over the future of the West Bank -- land that would form the core of a future Palestine under the "two-state solution" endorsed by much of the international community and backed this year by Israeli Prime Minister Binyamin Netanyahu.

Creation of a Palestinian state would fix Israel's eastern border, which remains undefined more than 60 years after the country gained independence, and might require the evacuation of tens of thousands of Jewish settlers from dozens of communities in the West Bank.

Unlike Israel's 2005 evacuation of settlers from the Gaza Strip, the removal of Jews from the biblical lands of Judea and Samaria would stir intense religious sentiment.

Last month, members of the Israel Defense Forces' Kfir Brigade unveiled banners saying they would refuse to remove West Bank settlements -- a highly charged act of dissidence in an institution considered integral to the survival of the Israeli state.

Defense Minister Ehud Barak also has clashed with the heads of a group of special religious schools, called hesder yeshiva, that allow religiously inclined recruits to reduce their compulsory military service and spend the additional time studying their faith. He recently moved to expel from the program a yeshiva in the West Bank settlement of Har Bracha because its leader, Rabbi Eliezer Melamed, said troops had a religious obligation to disobey orders to remove Jews from the West Bank.

The school is located on a hilltop that Jews believe is among the first places their ancestors stopped on returning from Egypt. A spokesman, Yonaton Behar, said Melamed was simply reiterating what any observant Jew should believe -- that reclaiming the core of biblical Israel is a duty that transcends the demands of the state.

He said residents of Har Bracha are not worried about the peace talks. The ongoing political discussion, he said, is just an interlude to full Israeli sovereignty over an area where he said Palestinians could be allowed to remain under a restricted status alluded to in the Bible as "ger toshav," or "resident alien."

Behar, who arrived here from New York in the 1980s, said that "from the day I got here, we've been hearing about a Palestinian state, and all I've seen is growth" in a settlement that began with a dozen families, is now up to 200 and has 70 apartments under construction.

"The truth is that the religious are growing and will be a majority" in Israel, he said, noting his six children and Melamed's 12, while secular families "have one child and a dog."

"It's just a matter of time."

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