Israel has resumed construction of one of the most controversial parts of its separation barrier in the West Bank - deep inside the occupied territory.
The Israeli military said there had been no major disturbances
The attorney general approved the work near Ariel settlement on Monday, four months after a court order halted it.
Palestinian Prime Minister Ahmed Qurei accused Israel of bad faith by resuming construction during ceasefire talks.
Hundreds of Palestinian and foreign protesters scuffled with Israeli police in a Palestinian village near Ariel.
Israel says the barrier is aimed at preventing suicide bombers but Palestinians regard it as a land grab.
Some of the barrier's route follows the perimeter of the West Bank - often encroaching on the occupied land by a few kilometres - but the Ariel section is situated about 20km (12 miles) inside the West Bank.
Residents of the nearby Palestinian town of Salfit have stopped construction since October by appealing to Israel's Supreme Court.
The decision by Israeli Attorney General Menachem Mazuz to approve the resumption of construction has been deplored as an act of bad faith by Palestinians.
"How are we going to convince our people and factions that we are trying to end Israeli occupation while Israel is imposing facts on the ground?" said Palestinian cabinet minister Saeb Erekat.
The BBC's Barbara Plett in Jerusalem says Israel's resumption of work on the fence around Ariel could set the stage for confrontation.
It is widely believed that Israeli Prime Minister Ariel Sharon intends to connect the four-kilometre (2.5-mile) section of fence around Ariel to the main West Bank barrier at a later date, she says.
Such a measure would threaten the territorial continuity of any future Palestinian state, our correspondent adds.
Israel's move comes after a week of talks between Palestinian President Mahmoud Abbas and militant leaders aimed at ending rocket attacks on Israel.
About 300 local residents and foreign protesters from the International Solidarity Movement were involved in minor scuffles with Israeli soldiers guarding the construction site, the AFP news agency said.
An Israeli military spokeswoman confirmed a demonstration was taking place but said there were no reports of major disturbances.
Palestinian and international criticism and court rulings have forced Israel to revise the barrier's route, but it insists the project must be completed to protect its cities from suicide bombers.
About one-third has been built so far, mostly in the northern West Bank. Israel occupied the West Bank and Gaza Strip - home to about four million Palestinians - during the 1967 Six Day war.