The dispute over Sussiya and other battles over land ownership involving Israeli settlers has raised the potential of right-wing split in the government.
Confrontations between security forces and settlers broke out on Tuesday following preparations by police to demolish the Dreinoff Houses on the settlement Bet El.
Defence Minister Moshe Yaalon ordered the demolition after the High Court ruled that the residential buildings, built on private Palestinian land, should be taken down.
The tension has caused a rift within the government, with Mr Yaalon insisting that he is upholding the law. "I have worked and continue to work on behalf of the settlements in Judea and Samaria" he said. "But whoever thinks I will break the law is wrong. I won't lend my hand to anarchy."
A number of ministers and MKs from both Likud and Jewish Home, including Education Minister Naftali Bennett, opposed Mr Yaalon and announced their support for the settlers.
Settlers tried to fight off a police demolition team in Bet El
Mr Bennett travelled to Bet El and gave a speech accusing of the Defence Minister of being "foolhardy" and "inciting" the settlers. Protesters called on Mr Bennett to leave the government if the Dreinoff Houses are demolished.
International pressure on the government to prevent the demolition in Sussiya came as foreign governments also attacked Israel for authorising 1,000 new housing units in the West Bank.
The announcement of new settlements two weeks ago was partly motivated by the government's desire to mollify the settlers over the planned demolition in Bet El.
On Tuesday, the Foreign Office Minister Tobias Ellwood expressed concern over the settlement building, calling upon Israel to "discard these plans and refrain from such steps. Every settlement announcement has a negative impact on prospects for peace and a negotiated solution."
On Wednesday, after a final ruling by the High Court, demolition in Bet El began. While Mr Bennett and his party colleague, Justice Minister Ayelet Shaked, insisted that the court must be respected, some other Jewish Home MKs were less subdued: Agriculture Minister Uri Ariel demanded the government immediately authorise new building in the settlements.
Prime Minister Benjamin Netanyahu acquiesced, authorising 300 new housing units in Bet El and 500 housing units in Jerusalem neighbourhoods across the pre-1967 border.
The episode has highlighted once again how the prime minister is caught between diplomatic necessities and internal pressure within his coalition.
