Murder of five members of Fogel family in Jewish settlement of Itamar has led to anger on both sides of divide

The children's bicycles still lean up against the side of the house. A three-month-old pink notice pinned to the door announces the birth of baby Hadas. A battered blue sofa sags on the front porch.

But there are now new additions to the Fogel family home in the deeply religious Jewish settlement of Itamar. Crime scene tape surrounds the house, an Israeli flag flies from the gate, soldiers stand guard. Neighbours gather in the street in small groups, talking in low voices about the brutal murder of five members of the family on Friday night: mother, father, two children and three-month-old Hadas. All had their throats cut.

As forensic experts pick their way through the blood-soaked rooms, the settlement's mayor, Moshe Goldschmidt, recounts the bare facts of the attack. At 9pm on Friday, he says, the security fence surrounding Itamar was breached, triggering an alarm. It was investigated but, believing it was caused by animals, the patrol did not alert Israeli soldiers in nearby military outposts.

The intruders went first to the house next to the Fogels', but it was empty. Then they watched the Fogel house, waiting patiently until a group of girls left with the eldest Fogel child, Tamar, aged 12, at 10.15pm.

"The terrorists entered the house, locked the door behind them and began butchering the family," said Goldschmidt. "No one in the community had any idea what was going on."

At 11pm, they left through a window and climbed back over the fence, again triggering the alarm. Again the patrol inspected; again the alarm was not raised.

At about midnight, Tamar returned from a youth event on the settlement and unexpectedly found the front door locked. She alerted a neighbour. Together they called to one of the two surviving children to open the door and discovered the scene of carnage inside. Two-year-old Yishai was covered in blood, saying "wake up, daddy, wake up", according to Goldschmidt.

The murder of the Fogel family has devastated Israel, and shocked many Palestinians. The Palestinian president, Mahmoud Abbas, described the killings as "inhuman and immoral". Tens of thousands attended the funerals in Jerusalem on Sunday. The Israeli government has pledged "an iron fist will land on the murderers" and that hundreds of new homes will be built in West Bank settlements in response to the killings.

Itamar, home to about 1,000 people deep inside the West Bank, is no stranger to violence. A newly updated sign at the gate of the settlement says 22 of its inhabitants have been killed in recent years. Clashes between the settlers of Itamar and local Palestinian villages are frequent. Tension in the area has risen over recent months with the alleged destruction of olive trees and "price tag" operations - retribution against Palestinians by settlers for Israeli government constraints on the construction of new homes.

But no one anticipated the shocking bloodshed of Friday night. Itamar residents are reluctant to blame the settlement security procedures, instead pointing the finger at the government.

The defence minister, Ehud Barak, should resign, says David Ha'ivri of the Shomron Liaison Office, a regional settlers' body. "He has totally failed in protecting the people of Israel. Every time he has removed a checkpoint, we have paid the price in blood."

The community dismisses questions about its legal right to settle in the West Bank, on land that almost the entire world and many Israelis believe will be part of a future Palestinian state. Instead it rigidly adheres to divine right.

"This is the heart of Israel, of our identity and our roots," says Goldschmidt's wife, Lea. "After 2,000 years of being exiled from our land, the remnant of the Jewish people has come together and returned." It is God's work, she says, and "a war for the Jewish people's survival".

Her husband speaks of the Palestinians with bitter contempt. "We see hatred all around us. What hasn't Israel given for peace? We are a people of peace. And all we've got back is bloodshed. This is our home. We are here to stay and the world is going to have to live with that."

Friday's horror has made Itamar stronger and more determined to grow, says Goldschmidt. "We are going to triple the size of our community."

The Israeli government's announcement on Sunday that it would permit the construction of more than 400 new homes in West Bank settlements is a derisory gesture, according to Ha'ivri. "This does not honour the dead. It is an insult to us and to the dead. Our own government has been choking us for the past few years." Expansion of the settlements, he adds, is an unassailable right, "not a payment for these terrible murders".

Sitting on a low breeze-block wall a few metres from the Fogels' house, Rivka, who did not want to give her surname, says God led her family to Itamar four years ago. Were her six children now frightened to live on the settlement? "No, children understand the situation very well. I trust God to save and guard my children. We will get stronger and stronger."