RAMALLAH, May 4 (Mohammed Assadi/Reuter) - Fire damaged a mosque in a Palestinian West Bank village on Tuesday and a mosque official blamed Jewish settlers in the latest such attack that could hamper renewed Middle East peace efforts.

The Israeli army said it was checking reports of the fire in the village of Lubban al-Sharqiya near the central West Bank city of Nablus.

Before morning prayers we saw fire in the mosque and it took about half an hour to put out. The mosque has been completely burned, Majed Daraghmeh told Reuters. Daraghmeh said he did not see settlers but blamed them because of earlier incidents in which he said crops and olive trees were vandalized.

I didn't see the settlers but I am certain that they did it because of their previous attacks on the village, he added.

Settlers who live near the Nablus area tend to be religiously motivated, claiming a biblical link to lands occupied by Israel in a 1967 war.

It was the latest of a number of similar incidents in which settlers have been blamed and comes as U.S.-mediated indirect peace talks between Israel and the Palestinians are due to get under way following 18 months of stalemate.

Last month Palestinians blamed settlers for vandalizing a mosque in the West Bank village of Hawara, also near Nablus, further fueling tensions in the area. The settlers who live in hilltop enclaves have grown ever bolder, Palestinians say.

Palestinians believe Jewish settlers were behind two December arson attacks on a mosque in the village of Yasuf and acts of vandalism in a cemetery in the village of Awarta in January.

The Israeli police arrested one teenager from a Jewish settlement in connection with the Yasuf mosque attack. He was questioned and released without charge.

Some 500,000 Jewish settlers live in the West Bank and areas near Jerusalem annexed by Israel after the 1967 war.

Major world powers view the settlements as illegal and an obstacle to any Palestinian-Israeli peace deal.

Ghassan Daghlas, a Palestinian official who monitors settlement activities in the Nablus governorate, said the rate of settler attacks has increased in the first quarter of this year compared with 2009. (Writing by Ori Lewis; Editing by Michael Roddy)