At least two bulldozers could be seen on Sunday levelling land around the village of Sikka, 15km from the city of Hebron.
"Work has begun in the area as planned," a spokeswoman for the Israeli Defence Ministry said.
"Right now measurements are being taken and we'll start building the fence in two or three weeks," she added.
Reports have suggested the renewed construction work was in retaliation for Tuesday's twin bus-bombings in Beir al-Saba.
The claim has been denied by the Defence Ministry who have said there was no link between the work and the bombings.
But Israeli officials have stressed that the bombings might have been stopped by the barrier.
The wall of separation has been ruled illegal by the International Court of Justice as it runs inside land seized by Israel in the 1967 war.
Palestinians see the barrier as a means to further deny them a viable independent state and annex Jewish settlements.
Israel's High Court has ruled that while it is legal to build the barrier inside the West Bank, a route will be chosen that will 'minimise' Palestinian suffering.