Israeli soldiers have fired tear gas and rubber bullets to disperse about 500 Palestinian villagers marching towards an illegal settlement outpost in the occupied West Bank.

Friday's procession, the largest of its kind for years, followed charges by Palestinians that the Israeli settlers, whose caravans abut village land, had attacked them twice this week.

Around half a million settlers have moved to the West Bank and East Jerusalem since Israel captured the area, along with the Gaza Strip, in 1967.

Palestinians want the settlements removed from what they see as their future state.

Men from Deir Jareer, including Christian and Muslim clerics, gathered for prayers on a craggy outcrop between their village and a cluster of half a dozen makeshift settler homes surrounded by Israeli army jeeps and soldiers.

Their march, preceded by a group of stone-throwing youths, was repeatedly pushed back by salvoes of Israeli tear gas.

Young boys howled from the effects of the gas and old men hitched up their robes to flee, holding onion slices to their noses.

Medics treated several men for gas inhalation and rubber bullet wounds.

Political gatherings are rare around Deir Jareer, and began after villagers say settlers torched about ten of their cars on Monday night, after planting an Israeli flag on a derelict church on Friday and pelting village youths with stones.

"This was a peaceful area. We're gathered today to say we refuse to be attacked and driven off our own land," said Sami Issa, a resident. "We want their army to pull the settlers out."

The Israeli military has said it is investigating the events leading up to the march.

Asked about Friday's incidents, an army spokesman said: "Soldiers responded to a group of some 250 stone-throwing youths with riot dispersal means near Ofra."

Solution receding

Biblical and historical sources are cited by Israel as claims to the land, but the UN considers the settlements illegal and most world powers say they are an obstacle to peace.

Israel has sanctioned the building of 120 settlements, but about 100 unauthorised outposts, considered illegal even under Israeli law, dot the West Bank.

The US is trying to revive long-stalled Israeli-Palestinian peace talks.

US Secretary of State John Kerry told Congress this month that these efforts were urgent because the chance to create a viable Palestinian state was fast receding.

"I believe the window for a two-state solution is shutting," Kerry said. "I think we have some period of time, a year to a year and a half to two years or it's over."