Israel's High Court on Monday ordered the state to empty and demolish by July 1 a settlement outpost which was due to be razed last week, turning down a government request for a delay until August 1.
The court in September ordered the demolition by May 1 of five buildings in the Ulpana neighbourhood of the Beit El settlement, which were built on privately owned Palestinian land not far from the West Bank city of Ramallah.
Late last month, the state asked the court to give it a further 90 days "to present their revised position" on the demolition order.
At a hearing on Sunday the court admonished the state for its request, but on Monday it nevertheless granted a further two-month reprieve in order to complete preparations for rehousing Ulpana's 50-odd residents.
"We are extending the date determined by the court for enforcement of the demolition orders by a further 60 days," said the court ruling, a copy of which was seen by AFP.
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It also awarded court costs of 15,000 shekels (3,000 euros, $3,900) to the Palestinian plaintiffs seeking the demolitions.
Israeli rights group Yesh Din, which represents the Palestinians in the case, welcomed the verdict.
"I sincerely hope that this ruling will be implemented immediately and without any further delay," it said in a statement.
Prime Minister Benjamin Netanyahu has said that evicting the Ulpana settlers would be "a decree the public would not be able to endure."
On April 4, he said he had asked the attorney general "to find a solution to the Ulpana neighbourhood in order to prevent it from being demolished."
Many in Netanyahu's right-wing coalition have called for a solution that would enable Ulpana's residents to remain.
Israel differentiates between "legal" settlements and "illegal" outposts, but the international community views all settlement on occupied territory as a violation of international law.