By late afternoon, the police were still barring entry to the neighborhood to all nonresidents, including reporters. Residents lined up in their cars at the makeshift roadblock said that at least eight buildings had been destroyed.

“I don’t know what to say,” said Louai Masouda, 21, a Wadi Hummus resident and carpenter, who thanked God that his own home was not under threat. “There are people with no homes now. Where can they live?”

A man of 60 who would give only his first name, Ziyad, for fear of attracting the attention of the authorities, said some owners of property in the demolished buildings had gone to the police station to file a complaint. But, he added, “There is no law in the state of Israel.”

Israel’s High Court rejected an appeal against the demolition orders by residents in June, and on Sunday dismissed another petition asking for a postponement, clearing the way for the demolitions. The court “ruled unequivocally that those who built houses in the area of the security fence knew that building in that area was prohibited, and took the law into their own hands,” Mr. Erdan said.

The decision to proceed with the demolition comes at a delicate time, even by the fraught standards of the Israeli-Palestinian dynamic. A little over a year ago, the Trump administration moved the United States Embassy from Tel Aviv to the contested holy city, and it is now preparing to unveil its long-awaited peace plan for the Israeli-Palestinian conflict.

After years of impasse, the Americans have sought to emphasize, including at a conference in Bahrain a month ago, the economic incentives that they say a political settlement could bring.