The office of the Israeli Defence Minister, Shaul Mofaz, said the outpost at the Kiryat Arba settlement was illegal because it had been built "on private Palestinian land".
About 200 settlers put up largely passive resistance and three were arrested for lashing out at troops, the AFP news agency reported.
On 15 November nine Israeli security force members and three settlers were ambushed and killed near Kiryat Arba by Palestinian militants, who threw hand grenades and fired upon them as they returned from prayers at the Tomb of the Patriarchs shrine.
Violent attack
It was one of the most violent attacks in Hebron in months, with the most senior Israeli military officer to have been killed in the present intifada - army commander for Hebron Colonel Dror Weinberg - among the dead.
Three Palestinian militants who carried out the attack, believed to belong to Islamic Jihad, were also killed.
About 450 Israeli settlers live in heavily-protected enclaves among Hebron's 130,000 Palestinians.
The November attack prompted Israeli soldiers to impose curfews and take control of Palestinian sections of Hebron, which was divided under a 1997 interim peace deal.
Sharon pledge
Jewish settlers also called on the Israeli Government to permit them to build a continuous strip of housing that would link Kiryat Arba with Hebron so that they could pray at Jewish holy sites.
Since then Israeli Prime Minister Ariel Sharon has pledged to build a Jewish-controlled corridor through the centre of Hebron despite strong Arab and international criticism.
Attacks have continued in Hebron despite the security presence, with two Israeli soldiers shot dead on 12 December after Palestinian gunmen opened fire on an army outpost.
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