World Bulletin / News Desk

Militant settlers vandalised Palestinian cars in Jerusalem on Monday, their second attack in a week in apparent retribution for plans to move 30 settler families from illegally built homes.

Israeli police says there could be further attacks before a July 1 deadline to move the families.

"The main suspicion we are looking at is that it is a 'Price Tag' (attack)," police spokesman Micky Rosenfeld said, referring to violence by militant settlers who have vowed to exact revenge for any attempt to curb settlement in the occupied West Bank.

Palestinians fear Israeli settlements, built on land Israel occupied in 1967, will deny them a viable state. The U.N. World Court ruled the settlements illegal.

The name "Ulpana", an area in Beit El settlement where the Supreme Court found that five apartment houses had been built illegally on private Palestinian land, was daubed on one of seven vehicles whose tyres were slashed in East Jerusalem.

On Friday, anti-Arab slogans were spray-painted on vehicles in Neve Shalom, a community of Jewish and Arab peace activists in central Israel.

Police suspect "Price Tag" activists were responsible and appointed an investigative team, but have not made any arrests.

The government plans to move the 30 families in Ulpana to alternative housing in a nearby military zone. It said it would build 851 new settler homes in the West Bank, drawing Palestinian and international condemnation.