Unknown attackers set fire to a West Bank mosque and sprayed it with Hebrew graffiti early on Tuesday, in an incident that bore the hallmarks of an attack by extremist Jewish settlers.

The incident took place in Jaba village between Jerusalem and the West Bank town of Ramallah, police said.

"In the middle of the night ... somebody entered the mosque, broke the window and threw a match causing a fire," local resident Sheikh Datoun told Israel´s army radio.

"They wrote in Hebrew: ´The war has begun,´ and ´Pay the price´," he said, indicating that the villagers had seen the fire and rushed to put it out.

Israel police said they had yet to carry out a forensic investigation but said there were signs pointing to settler activists.

Police were examining the possibility it was a "price tag incident," spokesman Micky Rosenfeld said. "That´s one of the main directions that we´ll be looking into," he told AFP.

"Price tag" is a euphemism for revenge hate crimes by Israeli extremists carried out in protest at Israeli government moves against the settlements.

They normally target Palestinians and Arabs but have also been directed at leftwing Israeli activists and the army. Incidents have included multiple arson attacks on cars and mosques.

The perpetrators are rarely caught, although in recent months the security forces have increased efforts to clamp down on the phenomenon after an attack on an army base last year.

Israeli leaders were quick to condemn the latest incident. "This was the work of intolerant, irresponsible lawbreakers," Prime Minister Benjamin Netanyahu said in a statement. "We will act quickly in order to bring them to justice."

Defence Minister Ehud Barak said it was a "grave and criminal incident meant to harm the fabric of life in the area and divert the army and security forces from their mission, including protecting Israeli citizens in the area."

"I have instructed the army and security officials to use all means to apprehend the perpetrators and bring them to justice," he said in a statement.

It was the third such attack since June 6, when MPs voted down a settler-backed bill aimed at circumventing a court order to demolish homes in the Ulpana neighbourhood, an outpost built on the outskirts of Beit El settlement near Ramallah.

Last week, attackers vandalised Palestinian cars in east Jerusalem slashing tyres and spraying pro-settler Hebrew graffiti on the vehicles. A week earlier, vandals did the same at a mixed Arab-Jewish community west of Jerusalem. (Copyright © 2012 Agence France Presse. 06/19/12)