* Gunfire at start of West Bank olive harvest
* Palestinians say Israeli police protection not enough
* Oxfam says potential growth industry plagued by violence
By Mohammed Assadi
BURIN, West Bank, Oct 15 (Reuters) - Semi-automatic assault rifles are not usually associated with olive harvesting, but this is the West Bank where Jewish settlers and Palestinian farmers clash over the crop every year.
On Friday, the first day of the official harvest, Palestinians picking the fruit fled in panic when shots were fired and three or four Jewish settlers with assault rifles appeared running and crouching among the olive trees.
Israeli soldiers on standby for just such a clash were called to Elon Moreh after shots were fired near the settlement east of Nablus in the Israeli-occupied territory.
Conflicting accounts of the events were reported by settlers and Palestinians, who accused each other of initiating the violence. No injuries were reported. A Palestinian was arrested. "Every year in olive harvest season radical left-wing activists arrive from Israel and the world and try to create provocations and conflicts to smear Israel's name," commented Gershon Mesika, of the Samaria settlers' council.
He said outside activists had stirred trouble and Palestinians had assaulted a settler. The Palestinians said settlers drove them from the grove, firing shots in the air.
On the Richter scale of West Bank incidents, it was a rumble. But lethal violence is a latent danger in this season, when Palestinians garner olive from groves that Jewish settlers believe are too close to their homes for security.
Rock-throwing, fist-fights, tree-burning and gunfire are frequent features of the harvest weeks, so much so that Israeli army and police units prepare specifically for the period.
"HARASSMENT COMMON"
The Israeli rights group Yesh Din said this week that the olive harvest "is often disturbed by extremists among the settlers, who take the law into their own hands..".
A report by the charity Oxfam, issued in Jerusalem on Friday, said "settler attacks or harassment against Palestinian olive farmers are common" and increase at harvest time.
There are over 100 settlements in the West Bank and East Jerusalem, where half a million Jews live next to 2.5 million Palestinians. Many consider the West Bank, which they call Judea and Samaria, to be the biblical birthright of the Jewish people.
Israel does not accept a World Court ruling that its settlements are illegal under international law although it considers smaller so-called outposts, built in remote areas mainly by ultra-religious Jews, to be illegal.
Israeli Prime Minister Benjamin Netanyahu is resisting Palestinian demands and U.S. pressure to extend a moratorium on settlement building which expired after 10 months on Sept 26, and peace talks remain suspended over this dispute.
Oxfam's report said olive oil currently yields up to $100 million a year in incomes for the poorest Palestinian families, a figure that could be doubled with modest investment and simple changes in farming methods.
"Numerous obstacles ranging from a lack of investment in farming practices to the impact of settler violence are stifling its true potential," Oxfam said. But investment could not overcome Israeli restrictions on access to the land.
Visiting Palestinian olive farms this week, Reuters talked to Mohammad Zaben, who said he could not find labour for the harvest because of fears of attacks by Jewish settlers.
The 60-year-old father of six had just received an Israeli notice that he could harvest his grove adjacent to the Jewish settlement of Yitzhar under Israeli police and army protection.
But the trees lie right below Yitzhar and "no one dares to get out there". So Zaben and his son were harvesting on their own, aware Israeli protection was not available indefinitely.
"We cannot protect the entire area," said an Israeli army officer in the field, who declined to be named as he was not authorised to speak to the media.
A settler spokesman, David Ha'ivri, dismissed the complaints of "foreign organisations" who he said staged provocations to attract media attention and depict settlers "as a bunch of violent bandits" and themselves as "saviour of the oppressed".
(Additional reporting by Abed Omar Qusini)
(Writing by Douglas Hamilton and Mohammed Assadi; editing by Samia Nakhoul)
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