Israeli bulldozers destroyed the prefabricated shelters in the village of Um Al-Kheir, some of them built with European Union funding, early on Tuesday, said the B'Tselem NGO.
Israeli police forcibly evacuated residents who attempted to prevent the demolitions, said the group, which campaigns against Israel's occupation of the West Bank and regularly criticises abuses in the Palestinian territories.
An AFP photographer at the site saw children playing amid twisted iron sheets and personal belongings, under searing heat.
B'Tselem said the demolitions had left 16 children homeless.
The structures had been built with EU aid after houses in the village, on the southern tip of the West Bank, were demolished at least eight times, Palestinian prime minister Rami Hamdallah said in a statement.
Signup to our newsletter and follow us on Facebook and Twitter!
"Israel is relentlessly destroying Palestinians' homes and livelihoods in order to make way for more illegal settlements," he said.
About 600,000 Israeli settlers live in the West Bank and east Jerusalem, Palestinian territories occupied by Israel since 1967.
The international community sees the settlements as a major obstacle to the creation of a Palestinian state and therefore to peace between the two sides.
Settlement construction has gone hand-in-hand with demolitions of Palestinian homes.
Um Al-Kheir lies close to the Israeli settlement of Carmel.
Israel argues that most of the buildings it demolishes have been constructed without building permits. But the necessary permits are rarely given to Palestinians.
COGAT, the department of Israel's defence ministry in charge of the occupied territories, did not immediately comment on the Um Al-Kheir demolitions.