The three soldiers, bored and cold on a bleak, overcast day, stood idly at their command post, occasionally moving from one spot to another to break the monotony. Stretched out before them were the hills of Hebron, a city of 70,000 Arabs, the second largest in the Israeli-occupied West Bank.

The command post -- two standard Israeli Army guard towers and a small shack for shelter from the rain -- is on one of the Hebron hills known as Tel Rumeida. It is far from a front-line position in the Arab-Israeli conflict. But this spot, where the soldiers stand constant guard over six Jewish families numbering 25 people, is a point of conflict, not only between Arabs and Jews but among Israelis, who are deeply divided over the wisdom of creating settlements like this in the midst of Arab population centers.

The precarious but stubborn existence of the Tel Rumeida settlers symbolizes those divisions, particularly as they are played out in the internal politics of Israel. The settlement has been denounced as illegal by government ministers from the Labor Party and defended by officials of the Likud bloc, Labor's partner in the national unity government of Prime Minister Shimon Peres.

Attempts by the settlers to expand into several nearby lots have been blocked by the Israeli Army. At the same time, the Army has made no move against the existing settlement and has continued to protect it. Tel Rumeida has settled into the status quo as has the government on the whole thorny issue of West Bank settlement.

Although most Israelis' attention is now focused on southern Lebanon and the changes that have accompanied the first stage of the Israeli Army's pullback there, the West Bank and its settlers remain one of the most sensitive issues in Israeli politics. The issue flared up earlier this month, touched off by the deaths of two Israelis in West Bank attacks and by diplomatic activity aimed at raising the question of the region's future.

Tel Rumeida was created overnight last August by settlers who correctly calculated that following Israel's parliamentary elections the prosettlement Likud bloc was unlikely to control the next Israeli government.

It started as three temporary trailers. Before the new government took power, there were eight housing units on the hill, connected to the electrical and telephone systems that serve Hebron. In what amounts to the settlement's front yard, directly below the soldiers' command post, there is a newly installed, sturdy wooden children's swing set and two benches from which the parents can watch their children at play.

Inside one of the housing units, Shelli Karzen, 24, one of the original settlers of Tel Rumeida, said today, "We're very, very happy to be here."

"It's a pleasure to live here rather than in the middle of the city with all the noise and traffic," she said. "We consider ourselves the suburbia of Hebron."

Haim Bar-Lev, the Labor Party minister of police in the national unity government, has a different description for Tel Rumeida.

"I think it is the utmost chutzpah on the part of Israeli citizens, in the existing economic situation, to say spitefully: 'We have a right, we're settling in the heart of the [Arab] area, provide us with security,' " Bar-Lev said in a recent radio interview. "I think this is the situation, and if it were up to me I definitely would not have enabled them to settle there."

Bar-Lev's criticism, which infuriated the settlers, was supported by Prime Minister Peres, although Peres said he might have chosen to express it differently. Just as quickly, Foreign Minister Yitzhak Shamir and other Likud leaders rushed to the defense of Tel Rumeida, maintaining that it was fully authorized in one of the last acts of the previous Likud government.

There the matter has rested, with neither the Labor Party nor the Likud bloc eager to force a showdown on the settlement issue that could break apart their precarious government coalition. The coalition agreement between the two parties called for the establishment of six new West Bank settlements, and this has dutifully been accomplished. But there is no money in the settlement budget to develop the sites, making the six new government-certified communities little more than dots on the map.

For a number of years, the growth of the West Bank Jewish settlements has been concentrated in large, established communities within driving distance of Jerusalem or Tel Aviv. Newly created settlements have not added significantly to the territory's Jewish population. But to ideologically motivated settlers such as those who live here, each dot on the map is another important outpost in their campaign to absorb the West Bank into Israel.

So far, even the militant settlers have not sought to force a real showdown on the settlement issue, which lurks just beneath the surface unity of the government.

"Things should have been developed here a lot faster," said Karzen, a native of Chicago and member of one of the two American families who live at Tel Rumeida. "We would like to see a beautiful neighborhood here, with houses, a synagogue. But I don't want to break up the national unity government over this. Nobody wants to see the unity government break apart."

How long the deadlock will hold here and elsewhere in the West Bank is impossible to predict. Certainly last summer's election and the subsequent division of power between the Labor Party and the Likud bloc did not resolve the settlement issue one way or another. But having arrived here in darkness one night last August, "creating a new fact" in the terminology of the settlers, Karzen appears confident that she is on this hill to stay.

"Jews want to live in Hebron and will live here as long as it is under Israeli rule," she said. "Jews are coming home now. That's the way it is."