Palestinian activists have begun setting up an "outpost" in E1, a strip of occupied West Bank land east of Jerusalem where Israel announced in November it would build thousands of new settler homes.

Friday's move was welcomed by a senior Palestinian official who described the step as a "highly creative and legitimate non-violent" way of protecting Palestinian land from Israeli settlement activities.

"We have set up 20 tents, and have enough equipment to stay here for a long time," said Abir Kopty, spokeswoman for the Popular Struggle Co-ordination Committee.

Kopty said more than 200 Palestinians had set up the new "village" called Bab al-Shams (Gate of the Sun) in a corridor of land between the edge of annexed East Jerusalem and the Maaleh Adumim settlement.

"We are willing to stay here until we ensure the right of the owners of the land to build on their lands," she said.

"This is a message that we will not remain silent anymore in the face of settlement expansion."

E1 falls within Area C of the West Bank, which is under full Israeli civilian and security control and where Palestinians find it almost impossible to obtain building permits.

The move is a twist on a tactic used by Israeli settlers who have frequently established new settlement outposts overnight by setting up camp on hilltops across the West Bank.

'Legitimate non-violent tool'

At the site, activists had set up around 25 large frame tents and many were cooking over camp fires as large Palestinian flags fluttered in the wind.

During the day, Israeli police visited the area and handed the activists an eviction order, declaring the area to be a closed military zone off-limits to civilians.

A spokesman for Israel's Civil Administration, the defence ministry unit responsible for planning in Area C, confirmed the eviction order, but the activists quickly managed to obtain a high court injunction against it, Kopty said on Twitter.

An activist raises a Palestinian flag as Bedouin men watch, in E1 outside the West Bank village of Ez Za'im [EPA]

The activists, who have set up Twitter and Facebook pages detailing the project, have connected part of their encampment to electricity but face exceptionally low winter temperatures at night.

Hanan Ashrawi, a senior member of the Palestine Liberation Organisation executive committee, hailed it as a "great initiative" which had the full backing of the leadership.

"This initiative is a highly creative and legitimate non-violent tool to protect our land from Israeli colonial plans," she said.

"We have the right to live anywhere in our state, and we call upon the international community to support such initiatives, as well as to protect those who are being threatened by Israeli occupation forces for exercising their right to peaceful resistance against the illegal Israeli occupation."

Six weeks ago, Israel announced plans to build thousands of settler homes in the highly sensitive but as yet largely uninhabited E1 area, in a move that sparked a global outcry.

The Palestinians bitterly oppose the E1 project, which experts say could largely cut off the northern West Bank from the south and hamper access to Jerusalem, making the creation of a viable Palestinian state highly problematic.

"What is happening at Bab al-Shams is reminder of the apartheid regime that Israel has imposed for the exclusive use of land for Jewish Israeli settlers all over Palestine," Ashrawi said.

"Those who have challenged the occupation forces are being threatened simply for trying to peacefully make use of the land belonging to the occupied State of Palestine."