Attack came hours after settlers stormed monument as some say 'homegrown terrorism' is now greatest threat to security

A gang of 50 Jewish settlers and rightwing activists have broken into an army base near the Israeli settlement of Kedumim in the West bank, setting fire to tyres and hurling rocks at both Israeli soldiers and Palestinians.

One settler forced open the door of a jeep carrying the Efraim Regional Brigade's commander, who was hit in the head with a rock and suffered minor injuries. Soldiers managed to force the group back outside the base after several minutes but by the time Israeli police arrived at the scene, most of the attackers had fled. Only two were arrested.

The attack is the latest in a wave of violent retributions exacted by extremist Jewish settler groups against Palestinians and the Israeli Defence Forces in response to government policy to evacuate illegal outposts in the West Bank. A spokesperson for the Israeli military said it was the most serious assault on its forces by Jewish activists to date.

Israel's defence minister, Ehud Barak, described the incident as "homegrown terror", which he warned would not be tolerated. "We will capture those responsible and they will stand trial," he vowed. "They endangered lives and their actions threaten to damage the delicate relations Israel has with its neighbours."

Hours after the attack, prime minister Binyamin Netanyahu called an emergency meeting to address the mounting threat posed by extremists. "The situation is intolerable," he told assembled ministers. "We must take care of these rioters with a firm hand. We will not tolerate a situation in which IDF officers and soldiers are attacked and distracted from protecting Israeli citizens."

The attack at Efraim took place just hours after 17 members of an extreme settler movement, the Hill Top Youth, stormed a religious monument on the border with Jordan. The group cut through a barbed-wire fence surrounding marking a closed military zone and seized the Qasr al-Yahud church, thought to be the site of Jesus's baptism by Saint John. Two minors were released and 15 other activists were detained for questioning by Israeli police.

They were protesting against Jordanian involvement in the ongoing debate over the Mughrabi Bridge, which leads from the Western Wall to the Temple Mount but was deemed unsafe and closed by the Jerusalem municipality this week.

Jordan has warned Israel that it should not make any changes to the bridge without first consulting Palestinian authorities. The settlers were warning Jordan not to involve themselves in matters concerning the Temple Mount.

While the rabbinate in Jerusalem has not yet commented on Tuesday's attacks, several senior rabbis warn they are indicative of a rise in religious extremism that threatens to destroy the Zionisit movement in Israel. In a similar attack in September, extremists broke into an Israeli army base near Nablus and cut the cables of 12 army vehicles.

Mosheh Lichtenstein, a prominent Israeli rabbi, claims this surge in violence can be understood as an expression of mounting frustration with a government decisions to withdraw from sections of Judea and Samaria but is both immoral and counter-productive.

"We believe we have a right to be here but that right must be won through moral means," Lichtenstein said. "I am very concerned by this violence, which runs against Jewish ethics."

Yaakov Peri, formerly head of the Israeli intelligence agency Shin Bet, says that moral judgments aside, unless dramatic actions is taken by the the government, army and intelligence to address this trend, extreme settler groups may drive Israel towards religious conflict. For this reason, he claims Jewish extremists now pose a greater threat to Israeli security than terrorism.

"An active terrorist is relatively easy for intelligence forces to find and stop. But when you are burning a mosque or cutting down olive trees, using weapons bought from any grocery store, it makes the job of the intelligence services much more complicated", he said. "[This violence] is becoming so extreme and so dangerous I am afraid it will become a religious war."