A Palestinian child receives food at the Souf refugee camp in Jodan in 1967. (UNRWA)

Less than a kilometre past the hillside olive groves of the sprawling Palestinian village of Sinjil, Dror Etkes turns left off route 60 as it dips and winds north through the terraced West Bank hills halfway between Ramallah and Nablus. He drives his white Mazda pick-up at alarming speed up a bumpy dirt road to the panoramic summit of what has been known for centuries in Arabic as Jebel Betin Halaweh but which is designated by the Israeli military the clinical name of Hill 804. A slight figure in his blue shirt, dark grey jeans, sunglasses and sandals, he parks the vehicle by the Army antenna, breathes in and announces with all the emphasis of the tour guide he once was: "We are now really in the heart of the ideological, religious, settlement movement."

It's easy to see what he means. We are in occupied Palestinian territory 21 kilometres east of the green line, which until the Six-Day War exactly 40 years ago denoted Israel's eastern border and in international law still does. On the windswept hilltops along a wide three-quarter circle to the west, north and east, the ridges are dominated by four Jewish settlements, the houses easily distinguishable from those in Palestinian villages by their red roofs, and eight of the satellite outposts, mainly consisting of up to 20 grey and functional container/caravans. Due west is Ma'ale Levona; to the north is Eli; to the east, just across Route 60, Shilo; and beyond it Shevut Rahel, founded in 1991 and named after a woman shot by Palestinian militants. And just south in the Shilo Valley is the open "industrial zone" with not a single factory on it, which along with the large municipal "jurisdictions" under their control mean that settlement-controlled land (including land previously cultivated by Palestinians) now accounts for 40 per cent of the West Bank.

A few minutes later, Etkes will pull off route 60 again and take a narrow paved road up to the 20-caravan settlement outpost of Nofei Nehemia, one of many identified as wholly illegal in the devastating Ariel Sharon- commissioned – but still to be implemented – 2005 report by the eminent lawyer Talia Sasson, showing how varying arms of the Israeli state – in this case the Housing and Construction Ministry – had secretly connived to establish such communities. Etkes keeps up a non-stop running commentary as we approach an outpost that has doubled in size in the past two years even though no one, including the Israeli government, pretends it has any legal right to be here. "Oh, someone's got a sense of humour," he says, translating a painted sign in Hebrew declaring: "Nofei Nehemia Security Road". "Look, here's an automatic barrier. Been here about half a year, I'd say. You can see the soldier manning it. This settlement is illegal in every way – supposed to be dismantled under the Road Map, Sasson report, everything." Legal or not, the settlers enjoy full military protection as Israeli citizens in a hostile environment. "It's in the DNA, it's in the system," says Etkes. "This is the military, supposed to be part of the law-enforcement agencies but in fact participating in massive law violation." As we drive back down the approach road, Etkes is so exasperated by the road sign that he jumps from the car and starts to wrench it from the ground. Changing his mind he says with a grin: "I'll come back when there aren't any journalists around."

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If the Jewish settlers living in the West Bank have a one-man nemesis, the fast-talking Etkes, who has joined us for the Jerusalem-Nablus leg of our journey along route 60, is the likeliest candidate. It is doubtful that any Israeli knows more about the evolving political geography of the West Bank than he does. Much of his time since 2001, when he became director of Peace Now's settlement-watch programme, is spent photographing and documenting in minute detail the growth of the Israeli civilian presence in the West Bank. At the peak of the intifada, when it was blatantly unsafe for cars with Israeli plates to drive through the West Bank without armed escort, Etkes would put on his flak jacket – ironically to avoid being shot by Palestinian snipers on the repeated journeys he took, alone, to monitor and expose the settlers' relentless encroachment on Palestinian land.

Increasingly Etkes concentrates on legal actions designed to secure eviction from outposts which are both known to be illegal under Israeli law and erected on privately owned Palestinian land. When nine houses were finally demolished in the Amona outpost last year amid serious violence between settlers and police, it was the result of an incontrovertible case devised by Etkes. When the "unauthorised" Migron outpost of 60 caravans, east of Ramallah – on which the Sasson report established the Housing Ministry had spent nearly $900,000 on infrastructure and two fixed buildings – is finally demolished, it will be because of a case brought by Etkes and the Palestinian landowners. "That will be the biggest settlement outpost [to be evacuated] ever outside Gaza and the settlers are terrified of this because we are now grabbing them in the balls in certain places," says Etkes cheerfully. "We can go from place to place wherever there is private Palestinian land which was seized without any permission or any licences without any papers and we can screw them big-time."

Important as Etkes believes, no doubt rightly, these actions to be in putting settlers on the defensive, they cannot of course remove the elephant in the room: the parent settlements themselves, all 121 of them, comprising 260,000 settlers in the West Bank in all. (If the settlements in Arab East Jerusalem, whose annexation by Israel has never been accepted by the international community, are included there are roughly 450,000 settlers in occupied territory.) The adults are eligible to vote in Israeli elections; almost all have a vested interest in remaining under Israeli jurisdiction. And these numbers have grown from exactly zero since the triumphant victory in the war whose 40th anniversary Israel will commemorate, with some hesitation and self-reflection, next month. The anniversary of the war is also a reminder that the occupation of the West Bank – of which the settlements and the huge security, road and infrastructure apparatus that surrounds them are the most visible symbols – has lasted exactly 40 years.

It all started here in Kibbutz Kfar Etzion, which in the late spring is a lush oasis of trees and flowers, with all the hillside space it needs to grow the orchids and cherries that help make it one of the most prosperous settlements in the West Bank. Kfar Etzion has a special place in Israeli hearts because of the heroic last stand in the 1948 war, in the Etzion Bloc of four kibbutzim, in which 155 Jewish defenders, men and women, were killed by the Arab Legion irregulars and local villagers. The worst carnage was at Kfar Etzion, an orthodox kibbutz, where almost all those who surrendered were massacred. The women and children had mostly been evacuated, including the mother of Gerry Katz, now 60, the man responsible for the outstanding gardens of the kibbutz today. His father was killed in the last battle.

Katz, tanned in his blue workshirt, chinos, sandals and kippa (skullcap), says that each year the children of Kfar Etzion would gaze longingly down from Jerusalem on what was now Jordanian territory – today the old Jordanian command post is the kibbutz's communications centre – and dream of coming back. Which about half the 58 children from the kibbutz – Katz was the last to be born there – eventually succeeded in doing, with the Labour government's hesitant blessing. "It was like the Jews coming back to the land of Abraham all over again," says Katz today, who came straight here from his wartime Army service. "It was the metaphysical becoming reality." Of course, the special role in Israeli history of the kibbutz made it a prime site for all those agitating after 1967 for settlement in the West Bank. But while Kfar Etzion was special to Katz above all, he himself is in no doubt that it was at one with the dream of Jews living elsewhere in what had been a few months earlier the Jordanian- controlled West Bank. "Our land is in Judaea and Samaria," he says using the name for the territory favoured by many Israelis. "This is Jewish land." No he did not think, even now, that it should be formally annexed. "The eternal nation moves slowly," he adds enigmatically.

It is hard to overestimate the foreboding inside Israel that preceded the war. The causes were complex and, like most issues in the Middle East, still disputed. But the most immediate triggers were the clashes between Israeli and Syrian forces on Israel's border with the Golan Heights and (the Egyptian president) Nasser's decision, amid a build-up of Egyptian forces in the Sinai, to close the Tiran Straits outside the Gulf of Aqaba. Whatever the rights and wrongs of the preceding months, almost every historian has commented that this felt to most Israelis like a war for what suddenly seemed like the fragile existence of a 19-year-old state that no Arab country then recognised, invoking for many memories of the Holocaust itself. There was, of course, a corresponding sense of relief and euphoria at the subsequent decisive victory after just six days, from the morning of 5 June to the evening of 10 June – much of it shared in the West. In London, the Daily Telegraph trumpeted the outcome as "The triumph of the civilised" , while in Paris Le Monde went deeper into the reasons for Western relief at Israel's victory. While acknowledging that it had happened "alas on the back of the Arabs", the paper declared: "In the past few days Europe has in a sense rid itself of the guilt incurred in the drama of the Second World War and before that the persecutions which accompanied the birth of Zionism."

The war cost the lives of more than 16,000 Arab men, the large majority Egyptian, and 800 Israeli soldiers. It left Israel in control of a million Arabs and large new swathes of territory, including the West Bank and Gaza, seized from Jordan and Egypt respectively, and the Golan Heights, overrun and captured from Syria. The political debate in Israel over what to do about the new conquests was almost immediate. The Labour politician and former general Yigal Allon, for example, produced a plan which provided for annexation of – and creation of civilian settlements along – the border with Jordan. Moshe Dayan, the triumphant Defence Minister, announced that he wanted an "invisible occupation", adding: "I want a policy whereby an Arab can be born, live and die in the West Bank without ever seeing an Israeli official."

At the same time, other forces were also at work, attracted by the possibilities of creating a "Greater Israel" from the River Jordan to the Mediterranean. These included – but were by no means confined to – the political right, which would 10 years later propel Menachem Begin to power, and religious Zionists like the Rabbi Moshe Levinger, who would go on to found Gush Emumim, the movement behind so many of today's settlements. Levinger quickly offered his support to attempts to re-settle Kfar Etzion in the face of initial ambivalence by the Prime Minister Levi Eshkol. And even for some of those who did not share the "Greater Israel" dream, there was another imperative, one which still survives, and which the Israeli writer Gershom Gorenberg (whose authoritative book on the first 10 years of settlement policy will shortly be published in Britain) describes as: "to create facts that would determine the final status of the land, to sculpt the political reality before negotiations ever got under way."

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