State-run Israeli radio, Reshet Bet, announced on Sunday that members of the group, known as the Hebrew Brigade" are armed with automatic rifles and equipped with jeeps and vicious attack dogs.
Quoting unidentified security sources, the radio said the group is made up of dozens of erstwhile cadres of the Kach movement, the "terrorist group" founded by Rabbi Meir Kahana and dedicated to the destruction of the Palestinian community in Israel, the West Bank, Gaza Strip and East Jerusalem.
Kahana, a one-time member of the Israeli parliament, the Knesset, called for the "extirpation" or "extermination" of non-Jews in Israel and the occupied territories, following the example of the ancient Israelites who ethnically cleansed the Canaanites as narrated in the Torah.
Kahana also advocated that democracy and Judaism were completely incompatible and that non-Jews could never attain equality in a truly Jewish state.
Kach has been declared a "terrorist group" by both Israel and the United States.
In 1995, a member of Kach named Egal Amir assassinated former Israeli Prime Minister Yitzhak Rabin for signing the Oslo Accords with the Palestine Liberation Organisation.
However, since Ariel Sharon came to power in Israel in 2001, the Israeli government, and especially the powerful military establishment, has been dealing rather leniently with Kach and similar far right groups, ostensibly because of the ideological affinity between Sharon's party Likud and the far-right parties.
A Hebrew newspaper, the Ma'ariv, published a report on the resurfacing vigilante group last week.
The Kach vigilantes, as they are commonly known, erect surprise roadblocks and checkpoints on roads used by Palestinian motorists, using attack dogs, the newspaper reported.
Sometimes, the extremists reportedly serve as a "back-up force" by "assisting" the army in "keeping law and order" by harassing Palestinian civilians.
Some members of the well-organised group have reportedly threatened and blackmailed Israeli security officers living in their respective settlements.
The Israeli army has acknowledged, rather begrudgingly, the existence of the group but denied that it was operating under its supervision.
Sharon's (L) Likud has ideological
affinity with the extremists
However, army spokesperson Eitan Arusi confirmed that "those people operate within the settlements and their main function is to prevent Palestinians from infiltrating their respective communities".
Arusi told Aljazeera.net that the army was ultimately responsible for the activities of the vigilantes.
Arusi's statements, however, were contradicted by another army spokesman, quoted earlier by Israeli radio, who sought to distance the army from the group.
A number of Knesset members have castigated the Israeli government for allowing the extremists to function.
"These are a bunch of killers and vile terrorists, I can't understand why our government allows them to function freely in the streets of the West Bank," said Ran Cohen, a member of the newly-founded neo-leftist party, Yahad.
Cohen, who described the group as a dangerous militia, called on the Israeli justice system to force the government to outlaw the group and end their activities.
One Israeli legal expert, Moshe Hangbi, accused the Israeli government of "indulging in a serious breach of the law".
"This terrorist organisation [Kach] is supposed to be outside the confines of the law since it was outlawed and declared a terrorist organisation in 1994," he said.
"The fact that it is allowed to function flies in the face of Israeli authorities," he added.
Attacks and massacres
Kach has a long record of attacking and harassing Palestinian civilians.
"These are a bunch of killers and vile terrorists, I can't understand why our government allows them to function freely"
neo-leftist party Yahad member
In the late 1970s and early 1980s, the right-wing extremists placed bombs in the cars of three Palestinian mayors, causing the legs of the former mayor of Nablus, Bassam Shaka'a, to be amputated.
In 1982, two armed men belonging to Kach attacked the campus of the University of Hebron with machine guns and hand grenades, killing and injuring dozens of students.
Also in the early 1980s, Kach members sought to destroy the al-Aqsa mosque in Jerusalem, using ground-to-ground missiles allegedly stolen from Israeli army barracks.
The bloodiest act against Palestinians by the movement took place in 1994 when Baruch Goldstein, an American immigrant, cold bloodedly murdered 29 unarmed worshippers while they were praying at the Ibrahimi mosque in downtown Hebron.
The worshippers were searched and had to pass through metal detectors before entering the prayer area.
The Kach leadership, along with the leaders of the settler movement of Gush Emunim, then enthusiastically supported the massacre, evoking a Talmudic edict that a thousand non-Jewish lives are not worth a Jew's fingernail.
Since the beginning of the intifada four years ago, extremists affiliated with Kach and other right-wing groups, such as Kahana Hay (Kahana is alive), have killed and injured hundreds of Palestinian civilians.
The same groups have also planned and carried out attacks on Arab schools in East Jerusalem and the Hebron region.