But according to the ruling handed down late on Sunday, the authorities have until 2017 to carry out the demolitions in Ofra, north of the West Bank city of Ramallah.
"Given the difficulty in implementing the demolitions, where families live in most of the buildings, and to allow them to find alternative accommodation, I propose that the demolition orders be carried out within two years of this judgment," judge Asher Grunis wrote.
It was a long-awaited response to a petition filed in 2008 by five Palestinian landowners and Israeli legal rights NGO Yesh Din.
"The petition before us relates to buildings about which there is no disputing the fact that they were constructed illegally," the court said.
Chief Justice Miriam Naor took a swipe at the government's foot-dragging over evicting Jewish settlers.
"By the end of the time stipulated, the demolition orders should be carried out with no attempts to postpone the inevitable, as is customary, unfortunately, in such cases," she wrote.
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Yesh Din's lawyer Shlomi Zachary hailed the ruling.
"By its decision the Supreme Court has made unequivocally clear that the law, human rights and particularly the right to property must be respected in the Palestinian territories," he told AFP.
Ofra, one of the oldest settlements in the occupied West Bank, has a population of 3,400.
It is deep inside the Palestinian territory, and is not part of the blocs of settlements that Israel will seek to retain as part of any future peace agreement with the Palestinians.
Haaretz newspaper said the government had been seeking to stave off judgment because much of Ofra is of dubious legality.
"The state argued that the buildings should not be demolished because the entire... settlement was built without permits and most of it is on private land, so the fate of these nine structures should be determined by the peace process, along with the fate of the rest of the settlement," it wrote.
Under international law all settlements on occupied territory are illegal, whether or not they are authorised by the Israeli government.