DEIR ISTIYA (West Bank) - Three cars were torched and graffiti was sprayed on a mosque in the northern West Bank on Wednesday, officials said, in the latest apparent "price tag" attack.

The incident took place in Deir Istiya, a Palestinian village 15 kilometres (nine miles) southwest of Nablus, and came 48 hours after Israeli police dismantled a Jewish settler outpost in the area.

"Three settlers came in a red car with Israeli plates at around 1:40 am and wrote 'price tag' on the wall of the mosque," village head Nathmi Salman Abu Nawwab said, quoting witnesses.

"They poured liquid on the cars and set them alight and then they quickly drove off," he said, noting that Deir Istiya was "surrounded by nine settlements" and had been targeted several times.

Israeli police spokesman Micky Rosenfeld said the perpetrators had also sprayed "Gal Aryeh Yosef" on the mosque walls and investigators were treating it as "a criminal incident with nationalist motives."

Rosenfeld said the incident appeared to be connected to the demolition on Sunday night of four wooden structures and a tent in Gal Aryeh Yosef outpost some 15 kilometres away.

Israeli Defence Minister Ehud Barak "strongly condemned" the incident and vowed to "act robustly" against the perpetrators.

"These activities are designed to damage the fragile relationship between Israelis and Palestinians in the Judaea and Samaria region (the West Bank), as well as between Israel and its neighbours," he said in a statement.

"Price tag" is a euphemism for revenge hate crimes by Israeli extremists, which normally target Palestinians and Arabs, but have recently been directed at Israeli left-wing activists and the army -- usually in retaliation for state moves to dismantle unauthorised settler outposts.

The attacks tend to involve the vandalism or destruction of Palestinian property and have included multiple arson attacks on cars and mosques, although the perpetrators are rarely caught.

Last year, police say 65 indictments were handed to extremists suspected of assault or for causing property damage in price tag attacks.

Despite the rising number of arson attacks, police say they are often unable to press charges given the lack of evidence.