JERUSALEM, Feb 7 (Reuters) - A Jerusalem monastery, built on the site where tradition says the tree used in the making of Jesus's cross once stood, was defaced with Death to Christians graffiti on Tuesday.

The words Price Tag daubed on a vandalized car parked outside the 11th-century Monastery of the Cross suggested that militant Jewish settlers were responsible and police said they were investigating that possibility as well as other angles.

The term refers to retribution the settlers say they will exact for any attempt by the Israeli government to curb settlement in the West Bank, an area Palestinians seek as part of a future state.

Price tag attacks have targeted mosques, Palestinian homes and Israeli military installations in the occupied West Bank but vandalism of Christian holy sites in Jerusalem is extremely rare.

Police said Death to Christians was painted in Hebrew on the outer wall of the fortress-like monastery administered by the Greek Orthodox church in a valley overlooked by Israel's parliament.

I am a priest and I forgive, Father Claudio of the monastery told Reuters.

Elsewhere in Jerusalem on Tuesday, Death to Arabs was painted in Hebrew on the wall of a playground of a Jewish-Arab bilingual school.

In the West Bank, anti-Muslim slogans were daubed on the walls of several homes in the village of Al-Lubban al-Sharqiya overnight, a Palestinian official said, blaming Jewish settlers.

A similar incident occurred on Sunday in the West Bank village of Al Janiyeh, the official said. (Writing by Jeffrey Heller, Additional reporting by Ali Sawafta in Ramallah, Editing by Ori Lewis)