The decision followed a bloody protest last week against the barrier by people who live in the area northwest of Jerusalem. Israeli troops fired live ammunition at the crowd, killing two people.
Meanwhile, Israeli security forces arrested three Palestinian youths in the West Bank who planned to carry out a suicide attack out of anger over the barrier, relatives said Sunday.
The youths, who were as young as 13, were among the youngest ever arrested for planning suicide attacks. Parents of one of the boys expressed outrage that militant groups had recruited young boys for attacks.
In other developments, thousands of Palestinians in the Gaza Strip (news - web sites) attended funerals of three Islamic Jihad activists killed in an Israeli airstrike on Saturday.
The Supreme Court issued its order in response to a request from the Popular Committee Against the Wall, a group of Israelis and Palestinians opposed to the barrier. Some 30 Israelis from the Jerusalem suburb of Mevasseret Zion joined the petition, organizers said.
Mohammed Dahla, a lawyer for the group, said the court ordered the suspension while the army re-examines the planned route of the barrier ahead of another hearing next week.
Court officials did not immediately comment.
The committee has asked the court to halt all construction in the area. It says the planned route of the barrier would effectively imprison 30,000 Palestinians in their towns and villages, cutting them off from Jerusalem and the West Bank city of Ramallah, the Palestinian commercial capital.
Israel says it needs the barrier to prevent suicide bombers and other attackers from entering its towns and cities.
Palestinians say the partially built barrier — which would dip deep into the West Bank in some areas — is a land grab meant to prevent them from establishing an independent state.
Last week, the Palestinians led a challenge of the barrier in the International Court of Justice in the Netherlands. In addition to Sunday's case, Israeli opponents of the barrier have launched wider legal challenges to the structure.
Under international pressure, Israel has begun making small changes in the route of the barrier, which it says are to minimize hardship on the Palestinians.
In the West Bank, people in the village of Tubas said Israeli troops arrested three youths who were planning a suicide attack.
Mohammed Abu Mahsen said his 13-year-old son, Tarek, along with his friends, Jaffer Hussein, 13, and Ibrahim Suafta, 14, left a letter saying they planned to carry out a shooting attack at an Israeli military checkpoint or army base.
"I want to carry out an attack against (Prime Minister Ariel) Sharon's fence. This fence, we will blow it up also, the Islamic Jihad youth movement," Tarek wrote.
"We want you to give out candies and don't cry for us and hold a big demonstration," he added, referring to traditional salutes given to "martyrs" who die for the Palestinian cause.
The younger boys claimed to be members of Islamic Jihad, while Suafta said he belonged to the Al Aqsa Martyrs' Brigades, a group linked to Yasser Arafat (news - web sites)'s Fatah (news - web sites) movement, family members said.
Tarek's parents were outraged and criticized Islamic Jihad for conscripting young boys. Most suicide bombers have been in their 20s. The youngest was 16.
Israeli police spokesman Gil Kleiman said the boys were arrested Thursday at a West Bank checkpoint while carrying "improvised" firearms and confessed to planning the attack.
Elsewhere in the West Bank, Palestinian sources said a 23-year-old member of the Al Aqsa Martyrs' Brigades, Mohammad Zuheir Owei, was killed in a gunfight with Israeli troops in the Balata refugee camp. The army said troops shot two gunmen after coming under fire but had no information on their conditions.
A second Palestinian, Iyad Abu Shalal, was killed during a shootout at Oweis' funeral, witnesses said. They said the shootout erupted after the army entered the camp during the funeral.
In Gaza, thousands of people participated in the funerals for the three men killed in Saturday's airstrike. "We promise Sharon that our retaliation is coming soon," said a masked militant at the funeral procession.
Also Sunday, a helicopter working for Israel's electric utility crashed in central Israel, killing two people on board, the company said. The company said the helicopter had been conducting surveillance work for a new high-tension wire. No further details were available.
