Israeli bulldozers have demolished more than 60 Palestinian shops and small businesses near the West Bank town of Tulkarm.

It was one of the biggest Israeli demolition operations of recent times, says the BBC's Middle East correspondent, Jeremy Cooke.

Israel is again destroying the Palestinian economy. It is a starvation policy Ziad Salem, council leader

The shops in the village of Nazlat Issa were demolished because they had been built without permits, the Israeli civil administration in the West Bank said.

But Palestinians have accused the occupying Israeli army of destroying their economy as a collective punishment to suppress the Palestinian intifada.

The incident provoked demonstrations by Palestinians who were dispersed by troops using tear gas.

The bulldozers, guarded by Israeli forces, moved in during the morning and by lunchtime the area was covered in twisted metal.

Palestinians say they were given 24 hours to empty buildings which included shops, a pharmacy and a medical centre.

They say the local economy has been left in ruins.

'Starvation policy'

Our correspondent says the Israeli action has left the Palestinian population furious and deeply bitter.

Ziad Salem, head of the local municipal council, said: "The Israelis are waging a war on the economic front as well.

"Israel is again destroying the Palestinian economy. It is a starvation policy."

Israel demolishes homes belonging to extremists

The village, which is on the edge of the West Bank, contains a market of 170 shops and is the main source of income for Nazlat Issa's residents.

The shops cater to Israeli Arab customers and some Israeli Jews who come from Israel because prices are low.

There were also rumours that the shops were cleared to make way for a security fence being built to protect Israel from suicide bombers, but this has been denied by officials.

The Israeli army has said more demolitions would be conducted in the area.

Israel has also demolished dozens of homes in the West Bank and Gaza because they belonged to Palestinians involved in bombing and shooting attacks on Israelis.

The World Bank in Gaza declined to comment on the Nazlat Issa incident, but noted that it has been "vocal" about the impact of Israeli measures on the Palestinian economy.

Nigel Roberts, director of the World Bank in the West Bank and Gaza, told BBC News Online last year: "Very little thought is given to the severe economic implications and the impact on reconciliation."