A confrontation between Israel's peace movement and ultranationalist settlers building a new Jewish outpost near the West Bank town of Nablus was defused today following a visit by Defense Minister Ezer Weizman, permitting work to continue on the settlement.

More than 1,000 members of the Peace Now movement had blocked a new road leading to the remote settlement, preventing heavy flatbed trucks from taking in prefabricated concrete houses for the first wave of settlers.

The protesters also had pushed large boulders across the access to the controversial settlement in an attempt to delay the project long enough to file for a temporary injunction with Israel's Supreme Court. In response, the Gush Emunim settlers threatened to call in thousands of supporters to confront the peace demonstrators.

Weizman, flying in by Army helicopter to the hilltop site near the Arab village of Jubieh, about a mile southeast of the Arab town of Nablus, told the protesters a government decision to establish the Elon Moreh outpost was "irrevocable" and that such demonstrations would not halt construction work.

Weizman voted against the settlement in a Cabinet meeting last Sunday. But, along with the remaining four dissenters, he said the majority decision will prevail. Elon Moreh is the first Jewish settlement begun on the West Bank since the signing of the Egyptian-Israeli peace treaty in March and last Sunday's decision drew a sharp protest from the United States.

Amid mounting opposition from Israel's left and local Palestinians the Israeli Army today declared the area closed and prevented reporters and photographers from entering the construction site or nearby Nablus.

Reports from Nablus said a number of Arab merchants closed their shops in protest of Elon Moreh. Israel Radio reported that some merchants were forced by the regional military command to reopen and that others followed suit.

Leaders of Peace Now, which more than a year ago was in the forefront of the movement advocating dismantlement of Jewish settlements in the Sinai in exchange for a peace treaty with Egypt, said they object particularly to the method the government used in establishing Elon Moreh.

In a swift military-supported operation on Thursday, tents and equipment for the nucleus of the settlement were flown to the stony hilltop by helicopter in what Peace Now members said was an abvious attempt to create a de facto presence before opponents could mount a legal challenge.

In a related development, Israel Foreign Minister Moshe Dayan today reversed himself and said he will attend the first working meeting of the West Bank-Gaza Strip autonomy negotiating teams in Alexandria, Egypt.

Dayan, a member of Israel's six-member bargaining team, had sought to put some distance between himself and the talks. But Foreign Ministry sources said he was persuaded during today's Cabinet meeting to participate in Monday's opening session.

The committee, led by Interior Minister Yosef Burg, will leave Monday morning for the talks, which expected to focus on procedure and an agenda.