West Bank settlers are given training before protests predicted to coincide with a Palestinian petition for UN recognition

The Israeli military is arming and training West Bank settlers in preparation for mass protests by Palestinians that it expects to erupt around the time that the UN is asked to recognise a Palestinian state, according to a leaked document.

Teargas and stun grenades are being distributed and training sessions held with settlement security teams, according to the document obtained by Haaretz.

The army has also drawn lines on maps around Jewish settlements close to Palestinian villages to guide troops, police and settlement security chiefs. Protesters who breach the first line will be subject to teargas and other methods of crowd dispersal. If a second "red line" is crossed, soldiers will be permitted to open fire at protesters' legs.

The Israel Defence Forces (IDF) confirmed it was liaising with settlers over Operation Summer Seeds, its codename for the military response to the expected protests. However, Palestinian leaders vigorously deny that violent protests are planned, and the Israeli defence minister, Ehud Barak, has said he expects September to pass quietly.

In a statement the IDF said: "The IDF maintains an ongoing, professional dialogue with the community leadership and security personnel throughout Judea and Samaria [the West Bank] while devoting great efforts to training local forces and preparing them to deal with any possible scenario.

"Recently, central command has completed training the majority of the first response teams; these exercises are ongoing. Beyond the aforementioned training, the IDF cannot comment further regarding its operational preparedness."

According to Haaretz, the army has held training sessions for settlement security officers at a military installation near the West Bank settlement of Shiloh.

Settlers are pressing the IDF to issue specific instructions on how they should respond to Palestinian protests, the paper says, but the military advocate general is concerned that such instructions could be interpreted as rules of engagement.

Hagit Ofran, of Peace Now, an Israeli organisation which monitors settlement activity, said: "We hope the army is making clear that non-violent protest is legitimate and no settlers should use any violence against unarmed demonstrators."

Arik Ascherman of Rabbis for Human Rights said there were already "serious questions and problems" with settlement security officials acting outside their designated boundaries. "We're very concerned that [the IDF move] will not reduce conflict but increase it," he said.

Preparation for anticipated protests has been under way for weeks, with extra training given to thousands of police officers and soldiers. The Israeli authorities have allocated funds for training exercises and the purchase of additional equipment.

The military has reportedly stockpiled around 200,000 litres of foul-smelling liquid to be fired from water cannon at protesters, or possibly dropped from planes. Supplies of stun grenades, rubber bullets and riot gear are also being topped up.

According to the leaked document, the IDF expects demonstrations to turn into "mass disorder". It says the protests may include "marches towards main junctions, Israeli communities and education centres; efforts at damaging symbols of [Israeli] government. Also there may be more extreme cases like shooting from within the demonstrations or even terrorist incidents. In all the scenarios, there is readiness to deal with incidents near the fences and the borders of the state of Israel."

Earlier this month, Avigdor Lieberman, Israel's rightwing foreign minister, said the Palestinians were preparing for "bloodshed the likes of which we've never seen before". Some commentators believed his remarks were aimed at inflaming the situation and stoking fears among the Israeli population.

The Palestinian spokesman Ghassan Khatib said Israel was "trying to fuel a fake picture of what will happen in September", adding: "These Israeli predictions of violence aren't true."

The Palestinian president, Mahmoud Abbas, has called for peaceful demonstrations in September to coincide with the Palestinians' petition to the UN for recognition of their state. But he has repeatedly said protests should be peaceful. "I insist on popular resistance and I insist that it be unarmed popular resistance so that nobody misunderstands us," he told the Palestine Liberation Organisation's central committee.

The Palestinian leadership is expected to present their request to be admitted to UN membership when the general assembly meets in September. Membership of the UN requires security council approval, which the US has already said it will veto.

The Palestinians are then expected to request an enhanced "non-member state" status, which needs a two-thirds majority in the general assembly. They claim to have the backing so far of 124 of the UN's 193 members, and expect to get a majority by the time of a vote.