Also Friday, hundreds of Palestinian prisoners in Israeli jails refused food, a day after a prison riot left 20 prisoners and five guards injured.
Separate White House summits with Israeli and Palestinian leaders in the past week so far have failed to energize halting peace moves.
The fence and the release of Palestinian prisoners by Israel have emerged as major issues of contention, though neither is mentioned in the U.S.-backed "road map" peace plan that aims to end the fighting and lead to Palestinian statehood by 2005.
The pro-Palestinian International Solidarity Movement said soldiers fired rubber bullets at about 300 Palestinians and 60 foreign supporters who dismantled a barbed-wire barrier in front of a section of the security fence near Tulkarem in the northern West Bank. The group said three Palestinians and eight foreigners were injured.
The army said troops had used "non-lethal means of crowd-dispersal" against violent protesters attempting to vandalize the fence. A spokesman said the army was investigating reports of injuries.
The barrier — 370-mile series of electric fences, trenches, concrete and coils of razor wire — is designed to stop Palestinian bombers and gunmen entering Israel. It has infuriated Palestinians because it cuts into their territory in several places, isolating towns and villages.
Since the main Palestinian militant groups declared a truce on June 29, Palestinians have demanded that Israel release most of its approximately 7,700 Palestinian prisoners. Israel has offered to free a few hundred, including dozens from the militant groups Hamas and Islamic Jihad.
But no militants have yet been freed, and Palestinian anger is growing over that issue and slow progress in other areas of the road map.
Israel's prison service said 550 inmates at two jails in southern Israel refused to eat meals Friday. It was not known if the fast would continue.
About 400 Palestinian inmates rioted on Thursday at a prison in the southern Israeli coastal city of Ashkelon, pelting guards with cups, plates and burning newspapers.
In a statement sent to The Associated Press in Beirut, Lebanon, Hamas warned that a failure to free the prisoners might lead it to reconsider its truce.
In meetings with Palestinian Prime Minister Mahmoud Abbas last Friday and Israeli premier Ariel Sharon on Tuesday, President Bush prodded both sides to meet their obligations under the road map. Bush said the Palestinians must disarm militant groups, and he expressed concern about Israel's security barrier.
Israel has said it will continue to build the disputed barrier, and announced Thursday it would build new housing in a Gaza Strip settlement, despite a road map requirement that Israel freeze all settlement activity, including the "natural growth" of existing settlements.
The peace plan leads through three stages to a Palestinian state in 2005, but beyond the freeze and removal of unauthorized Israeli outposts, it leaves the fate of the settlements for final negotiations.
Israel has pulled out of the West Bank town of Bethlehem and parts of the Gaza Strip, and under the road map is supposed to withdraw gradually from other Palestinian areas.
The Israeli and Palestinian security chiefs held inconclusive talks this week on whether Israel will turn more towns over to Palestinian control.
Also Friday, the Israeli army said it arrested eight militants overnight across the West Bank. One militant was shot and injured by soldiers after he drew a pistol, the military said.