The Amona outpost is under a court order to be evacuated by December 25 since it was built on private Palestinian land, but right-wing politicians have called for the around 40 families living there to be allowed to remain.
"The evacuation must occur before December 25," the court said in its ruling. "The court rejects the delay requested by the state."
In what seemed to be a sharp criticism of the government, it further said that "the duty to obey rulings is not a matter of choice.
Whether the government moves ahead with the demolition of Amona has been seen as a test case of whether it will heed international calls to halt settlement expansion in the West Bank.
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The government, which had sought a seven-month delay while it considered where to move the Amona settlers, is seen as the most right-wing in Israel's history.
Key members of Prime Minister Benjamin Netanyahu's coalition advocate settlement building while openly opposing the idea of a Palestinian state.
The high court ruled in 2014 that Amona, northeast of Ramallah in the central West Bank, must be evacuated.
There are concerns over how any evacuation will play out.
In 2006, the demolition of nine permanent houses in the outpost led to clashes between settlers and Israeli forces.
With the Amona deadline in mind, a committee of Israeli ministers yesterday approved a draft bill to legalise Jewish settlements built on private Palestinian land in communities that meet certain criteria.
The legislation is expected to apply to between 2,000 and 3,000 settler homes in the West Bank, which Israel seized in the 1967 Six Day War and which the Palestinians want for a future state of their own.
The bill must still be approved by Israel's Knesset, or parliament.
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