It was the biggest showdown between protesters and the security forces since Prime Minister Ariel Sharon announced last year that he would dismantle all 21 Jewish settlements in Gaza and four in the West Bank.
Protesters and police traded punches, and three injured police officers were carried away. Police on horseback then moved into the crowd, and several demonstrators were arrested.
Witnesses said at least 20 demonstrators were arrested by police at the entrance to the Kfar Maimon farming village, about 15km from the Gaza Strip.
About 15,000 Jews massed in the area were planning to march on Gaza settlements despite a police ban on their demonstration.
"This protest is illegal. The event is over. We are offering bus rides back to your homes," police shouted through loudspeakers at the protesters, many dressed in orange shirts, a symbol of opposition to the Gaza pullout.
Settler leaders said they would try again and again to reach Gaza, about 15km away, but it appeared unlikely they would be able to break through police cordons and roadblocks set up along the way.
With demonstrators kept out of Gaza, this week's protests in southern Israel were shaping up as the last major stand of withdrawal opponents.
Ariel Sharon will go ahead with a
plan to dismantle 21 settlements
The demonstrators had gathered at Kfar Maimon after making their way past police blockades on Monday.
Officials pledged to stop them from advancing further towards the Gush Katif settlement bloc where they plan a mass protest on Wednesday.
Hundreds of police and soldiers surrounded the protesters' tents as they slept, and a tense standoff began at daybreak on Tuesday.
Israeli security forces declared the area near the Gaza Strip a closed military zone to prevent ultranationalists from pouring into the Gaza settlements to resist the withdrawal scheduled to begin in mid-August.