Footage from an incident on Friday in the Palestinian village of Burin showed a group of settlers, likely form the Givat Ronen illegal outpost, attacking left-wing activists and Palestinians, with six people injured.
“This is the organised action of a terrorist organisation”, Barlev told the Kan public broadcaster.
The violence was carried out “in my view by a terror group that acts together and harmed Israeli citizens who came to demonstrate in the area”, he said, adding that the attack had seemingly been organised in advance.
“It is the tip of the iceberg of a terror organisation”, Barlev warned.
The minister also confirmed media reports that a police investigation was being assisted by the Shin Bet security service, the country’s internal intelligence agency.
In late December, the Shin Bet told the Times of Israel that extremist settler violence had increased by 50 percent in the past year.
He defended the arrests of the perpetrators of Friday’s attack, which he characterised as “another serious leap forward in the terror carried out by extremist settlers”.
The attack on Friday drew criticism from across Israel’s political spectrum, with several coalition lawmakers calling for the demolition of the outpost from where the assailants allegedly came.