Two Israel Defense Forces soldiers were expelled from their brigade and given 20 days in military prison, just a few days after they waved a pro-settler banner during their swearing-in ceremony.
The soldiers served in the Kfir [Lioncub] Brigade, an infantry unit originally set up to battle Palestinian guerrillas in the West Bank.
A military spokesman last week called the incident "a disgraceful disciplinary aberration."
The contentious flag, which the soldiers held at their swearing-in ceremony Thursday at the Western wall, had written on it: "We did not enlist in order to evacuate Jews."
The duties of the Kfir Brigade have somewhat diminished amid a law-and-order drive by Palestinian President Mahmoud Abbas' U.S.-backed administration, which wants to project power in the face of the rival Hamas Islamists now ruling Gaza.
Recently, the brigade has been sent repeatedly to evacuate the settlement of Homesh in the northern West Bank. The community which was evacuated during the 2005 disengagement plan, but settlers have returned to set up outpost there at least seven times.
"It became clear to all the soldiers that they would be going to Judea and Samaria [West Bank settlements], where there are not a lot of combat missions," an unnamed brother of one of the Kfir protesters said, using the biblical name to refer to the West Bank.
"Instead, they know they are going to take on the settlers. And everyone knows what the damage of that is, both on the personal and the ideological levels," he told Army Radio.
Kfir has been under military investigation for several high-profile cases where Palestinian civilians complained of abuse by the brigade. Its former commander was reprimanded for sanctioning use of force during questioning of suspects.
Some settler leaders voiced disapproval of the soldiers' behavior in the wake of the incident, saying that political expression has no place in the army. Defense Minister Ehud Barak on Sunday praised these responses as bearing the "right voice."
Although Prime Minister Benjamin Netanyahu is in no rush to remove settlements from occupied land where Palestinians seek statehood, Thursday's protest gave voice to nationalists' fears that he will eventually cave in to U.S. peacemaking pressure.
The U.S. administration said on Thursday that Israel had shown "willingness to curtail settlement activity", though Netanyahu has resisted calls for a total freeze on construction.
Israeli officials appear instead to be focused on dismantling outposts erected by settlers without government approval. Some of the outposts are meager lean-tos, others full-fledged annexes to established settlements. Israel pledged to crack down on them in 2003. Implementation has been fitful.
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