Beyond a yellow bulldozer resting on freshly turned red clay oil is a new road, snaking its way up a wood-topped hillside near this Arab village. The road in the Shomron Hills is strewn with uprooted olive trees, some of them more than a century old, and almond trees half-buried in the upturned soil.

The road slices through a crazy-quilt pattern of stone fences, the Arabs' primitive and time-honored assertion of domain. It stops at the edge of a pine grove, as if comtemplating whether to continue on through the trees.

It is the sabbath, and the diesel engines are silent. But soon the hillside will be sprinkled with beige, box-like prefabricated houses, and the olive grove will be home to several dozen families - the vanguard of a new Jewish civilian settlement to be called Karnei Shmron Bet.

When site-clearing work began on the hillside last month, the government - still smarting from the controversy over private land expropriated for the nearby Elon Moreh settlement - stressed that Karnei Shomron Bet would be estabished only on state-owned land. It said that nearly 2,000 acres of public land was available, more than enough for the 100 to 300 families who will live here.

But Arab residents interviewed in this vaillage about 10 miles west of Nablus tell a different story. They claim that all of the land except the forested hilltop is privately owned and has been for generations, dating back to the Turkish Ottoman Empire.

They say their land was seized without warning, and that they did not receive in advance the ladn expropriaiton orders that the military government is supposed to issued when it seizes property for "security" purposes.

They complain that their livelihood is being taken away under the guise of military necessity, when it is clear that Karnei Shomron Bet will be identicial to its sister putpost about a mile east along the Kalkilya-Nablus road, the civilian settlement called Karnei Shomron Alef.

Ahmed Badran, who like most palestinian farmers lives in the village but tends crops in the gently rolling hillside outside, said he lost 18 olive and almond trees when the bulldozer cut through some of his eight acres at the Karnei Shomron Bet site.

"There were no papers given to me. Suddenly, the bulldozer appeared and began working on the land," Badran said in an interview. Badra, who lives with his typically large Palestinian family in a small house in Azzun's narrow, winding streets, estimated his trees yielded the equivalent of about $1,200 a year.

"This small piece of land, 10 people can live off it, From wheat we make bread 'from the trees we get oil. By doing this, they hurt 10 people," Badran said. Rashad Selim, another Azzun farmer, said he owned five acres on the hillside, and that his land has been cut in half by the new road. He said he expects the settlement to be built on both halves.

"Nobody knows what they [the Israelis] are going to do. They haven't notified us. They just started working," said Selim, adding that the bulldozer uprooted three old olive trees and seven more he planted just three years ago.

Azzun villagers who claimed ownership of land on the Karnei Shomron site seemed puzzled when asked if they had clear title to their property, and documents to substantiate it.

"Everyone in Azzun knows who owns the land," one villager said. Azzun is a small village, and even two teen-aged boys showed no heistancy as they walked a visitor up the hillside, pointing to the plots one by one and rattling off the names of local farmers.

Badran, whose age shows in his lined and weathered face, smiled at the question of title deeds, saying, "The land is in my family since Father Adam. I used to pay taxes to the English, I remember [during the 1917-1948 British mandate]. I paid taxes to Jordan."

But the ambiguity of ownership, whole dismissed lightly by Arabs who have cultivated the land for generations, lingers. It has long been at the eart of the controversy over Israel's seizure of West Bank property for the construction of civilian settlements and it is the fuel for much of the smoldering resentment in the region, resentment which is many ways echoes the larger question of the West Bank and its future political status.

To the Arab, there is no ambiguity when he remembers that his grand-father tilled the soil and that the olive oil on his table always has come from the familiar grove where his father and older brothers worked.

Yet, to the Israeli government, the Azzun farmers have been squatters, reaping the fruits of public land once owned by the Jordanian crown and now part of the approximately 250,000 acres of "state land" which has been controlled by Israel since it occupied the West Bank during the 1967 Six-Day War.

Despite the presence of stakes indicating planned work on what the farmers claim is their land, the government insists that the settlement itself will be built only on state land, although an aide to Agricultural Minister Ariel Sharon concedes the road does cut through private property.

Li Landau, the aide, said, "The area for the settlement is government area. The road is on a private are. In Israel, as in America or any where else, when you need land for a road, you take it. We will pay every penny for damages."

Village mukhtars, or headmen, said they were withholding a formal protest to the military government until a survey is made of the Karnei Shomron Bet site and they can determine exactly where the settlement will be placed. Mukhtar Abdul Halik Yahi acknowledged that the government has promised compensation for damage done to cultivated land.

According to Palestinian attorneys who represent West Bank landowners in cases against the Israeli government, there are three catergories of "private" lands that routinely come into dispute.

There is mulk land, or private property for which the owner has clear title. And there is miri land, for which there is no clear title, but which the farmers have cultivated for generations and which is registered with Jordan's ministry of Finance for tax purposes.

Lastly, there are jiflik lands, which also have been cultivated for generations and which before the British mandate were under the title of the Ottoman Sultan. The farmers claim that their ownership of jiflik lands was recognized by the British and Jordanian governments, and that, prior to the 1967 war, Jordan was surveying the West Bank in order to issue title deeds to active farmers.

State lands, or public domain land that covers approximately 250,000 acres, includes deserts, forests, steep ridges and mountain tops, mostly arid and untillable.

Because of conflicting definitions of what constitutes private land, it is impossible to determine how much property has been seized by Israel for the 63 settlements in the West Bank since 1967.

When a special U.N. commission investigating settlements convened in Amman last month, witnesses from Western voluntary agencies working in the West Bank said 90 percent of the land used for Israeli settlements in the West Bank was privately owned, an assertion vehemently denied by the Israeli government.

The West Bank-based researchers, using the broad definition of private land that includes undeeded property actively under cultivation, said that 29 settlements in the West Bank highlands have taken nearly 8,000 acres from Arab landowners, and that 26 Jordan Valley outposts have taken 15,500 acres. In East Jerusalem, which was annexed by Israel in 1967, nearly 3,000 acres was seized, the U.N. commission was told.

The U.N. commissioner, which is due to issue a report next month, sought entry into the West Bank to conduct a land study, but Israel refused, saying the commission was created at the behest of Arab rejectionist states and that its findings would reflect only preconceived bias.

Although the government repeatedly says that it is the policy of the governments on state land only and avoid expropriation, Palestinian landowners complain that even settlements built on state land swallow up surrounding private land as the outposts grown in population, because each new settler creates a need for several acres of tillable land nearby.

Residents who live near Karnei Shomron Alef, the established sister outpost of Karneir Shomron Bet, pointed to fruit tree stumps outside the main fence of the outpost and said the settlers had cut down the trees on private land and extended the fence.

Haffez Shaka, a farmer who lives near the sprawling Hamra settlement in the Samarian highlands, says he lost 1,000 dunams of land, or about 250 acres, in 19758 after the outpost was built on state land.

He said that before the seizure, the land supported himself, his four brothers and their families, and that he had spent 10,000 Jordanian dinars, about $30,000, clearing, culviating and irrigating the property. He says he still owes 5,000 dinars to the Jordanian government.

"All the money we made we used to invest back into the land. Now we make just enough to support us," Shaka said in an interview. He said two of his brothers left the West Bank to find work in Abu Dhabi, United Arab Emirates.

Shaka said the family complained, but that when the government offered compensation, they refused before even finding out how much was being offered. Asked why, Shaka replied, "The land that your grandfather had, would you sell it? As much land as you have on earth, then you will have in heaven."

Like most Palestinian farmers interviewed, Shaka added that if he accepted compensation, he would have no legal basis for reclaiming the land should the status of the West Bank change.

In some cases, as with the Abu Giish family near Hamra, the military government seized property, and then rented it back at a nominal rate of about $100 a year. In other cases, such as with Muhammed Hassan Eissa, who lives across the road from the Ofra settlement near Ramallah, the government may not seize the land outright, but instead issue an oder prohibiting construction or other improvements, in anticipation of eventual expropriation.

Mohammed Ibrihim Hindi, who also lives next to Ofra, said an acre of his land was fenced off by Ofra settlers without an expropriation orders. Colied barbed wire surrounded a fig grove, which Hindi claims belongs to him.

While Palestinian human rights activists claim that the government's land expropiation policy and the proliferation of settlements in the West Bank have created "thousands of landless farmers," including many who return to their fields as workers employed by the new settlements, the government of Prime Minister Menachem Begin points to the considerable economic gains and improved standard of living in the West Bank since 1967, and aruges that the allegation and the statistics are incompatible.

But the dispute continues anyway, breeding the kind of graffiti spray-painted onto a wall in Hebron:

"Our land is our sister. You can take neither." CAPTION: Picture, Bulldozer cuts through an olive grove for a road to new Israeli settlement of Karnei Shomron Bet.; Map. No Caption, The Washington Post