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The Jerusalem Magistrate's Court on Thursday released from custody three teenaged settlers who were arrested for allegedly torching a West Bank mosque.

A disagreement in the State Attorney's Office in the central district has delayed indictments against those suspected in the arson in the Yasuf village last month, Haaretz has learned.

Charges may still be brought against the suspects, but the state attorney decided Thursday to hold off on filing the indictment. Some attorneys in the office believe the evidence is merely circumstantial and insufficient to justify filing charges.

Rabbi Itzik Shapira was released from detention Wednesday, a day after he was arrested for alleged involvement in the arson. Shapira is one of the heads of the Od Yosef Chai yeshiva in the nearby West Bank settlement of Yitzhar.

Five of Shapira's students were arrested last week on suspicion of torching the mosque's carpet and book closet and obstructing the investigation.

Shapira refused to say which of his students had taken part in the Yasuf mosque arson.

The court criticized the police and Shin Bet security service for Shapira's arrest. The state appealed the ruling at the Jerusalem District Court on Thursday.

Shapira's yeshiva innovated the "price tag" policy, whereby settlers have vowed to attack Palestinians in retaliation for government actions against West Bank settlements.

Two other arson suspects, both adults, were also brought to court Thursday for a hearing on the extension of their remand.