A mosque has been defaced and several vehicles set alight in the West Bank in what appears to be retaliation by Jewish settlers for the murder of an Israeli soldier and demolition of an illegal outpost.

The words "Geulat Zion loves Tomer Hazan" were scrawled in Hebrew on a wall of the mosque in the village of Burka, east of Ramallah. A Star of David was also painted in black on the wall.

Two cars and a truck parked nearby were also torched overnight, an Israeli police spokesperson said.

The graffiti on the mosque suggests the incident was what Jewish right-wing extremists call a 'price-tag', a retaliatory attack against non-Jews or their property.

Geulat Zion was an illegal Jewish settler outpost in the West bank that was demolished by Israeli forces earlier this week.

Tomer Hazan was a 20-year-old soldier with the Israel Defence Forces (IDF) who was killed by a Palestinian in September.

Israeli police spokesman Micky Rosenfeld says the attack is being investigated as a "criminal act with nationalistic motives".

The incident came a few hours after masked Jewish settlers attacked a school in the West Bank village of Jaloud, in another 'price-tag' attack over the demolition of Geulat Zion.

Stone-hurling settlers stormed the village vandalising cars and torching some 400 olive trees, local residents said.

They then moved on the local school where teachers had to lock children in classrooms to keep them safe as the building's doors were pelted, Fawzi Ali, a teacher said.

An Israeli soldier present at the scene was also wounded by a stone. The military said it arrested four settlers as suspects.

Military spokesman Lt. Col. Peter Lerner said: "[The army] frowns upon such grave actions, which destabilise the region and deviate security forces' attention from their main mission - combating terror."

Cars fire west bank
Several cars were torched in retaliation for the murder of an Israeli soldier and the demolition of an illegal Jewish settlement (Reuters)