JERUSALEM — Israeli bulldozers began demolishing a contested housing complex in a West Bank settlement on Wednesday as the prime minister's office announced the "immediate construction" of some 300 new units at another location in the same settlement and advanced plans for about 500 new units in east Jerusalem.

The move, which is likely to draw international rebuke, comes amid a standoff in the Beit El settlement, to the north of Jerusalem in the West Bank.

The standoff escalated sharply Wednesday, after the Israeli Supreme Court rejected a petition to overturn its initial ruling to demolish a complex in Beit El and ordered the destruction completed no later than Thursday. The complex was deemed illegal because it was under construction without prior Israeli authorization.

The military moved in and removed protesters holed up inside, but hundreds of Jewish settlers gathered at the scene and some fought with Israeli forces, who responded by firing water cannons at the protesters.

Tempers are high among some in the settler community as it marks a decade since Israel's "disengagement" from the Gaza Strip, when Israel in the summer of 2005 withdrew all its civilians and soldiers from all of the settlements there and also from two in the West Bank.

Israel initially promised to build the 300 housing units in Beit El three years ago, when it ordered the removal of other buildings constructed on private Palestinian land.

The new units announced by Benjamin Netanyahu's office are both in Beit El and elsewhere, including areas in east Jerusalem, which Israeli leaders say are inseparable neighborhoods of Jerusalem.

They say these neighborhoods will remain a part of Israel under any future peace agreement, but the Palestinians consider them settlements and say construction there is illegal, a position backed by the international community.

Israel captured the West Bank and east Jerusalem in 1967, and annexed east Jerusalem in a move that is not recognized internationally.

Israeli Education Minister Naftali Bennett, head of a pro-settler party, welcomed the announcement of the new units even as he criticized the top court's decision.

"The court's role is to judge; the government's role is to build," he said in a written statement. "We will build up the land of Israel, but in a legal and appropriate way."

But Lior Amichai of Israeli settlement watchdog Peace Now criticized the announcement, saying it was intended to "appease the settlers."

Also Wednesday, Israel's Shin Bet security agency and the Israeli police said they filed indictments against two young Israeli activists in connection with last month's arson attack of the Church of the Multiplication of the Loaves and Fish, a famous Catholic church near the Sea of Galilee. Three additional activists are under arrest in connection with the arson attack.

The Shin Bet and police said the activists were part of an extremist group of Israeli settler youth seeking to bring about religious "redemption." The group vandalized a number of Christian religious sites in the past two years, tried to disrupt Pope Benedict XVI's 2014 visit to the Holy Land, and in the past year committed "more significant terrorist attacks of arson" against Palestinian homes in the West Bank, according to the Shin Bet and Israeli police.

A month before the attack on the church, the head of the extremist group, Meir Ettinger, called on his blog for more attacks on Christian religious sites, Israeli authorities said. Israeli authorities have banned him from the West Bank settlements and from Jerusalem for a year.