The deadline for residents of Sur Baher to remove the buildings expired on Friday after the Supreme Court ruled in June that the structures in question violated a construction ban.
Sur Baher is a Palestinian community that lies southeast of Jerusalem's city centre. A sprawling village, it straddles the line between East Jerusalem and the West Bank.
Its political geography is further complicated because parts of Sur Baher lie inside the West Bank - but on the Israeli side of the barrier.
Israel says it built the barrier to stop Palestinian terror attacks; Palestinians call it an attempt to annex parts of the West Bank.
As the deadline's expiry approached, Sur Baher residents expressed dismay, some saying that they would be left homeless.
"I don't have any other place to live. I don't have an alternative," said Ismail Obeideh, a father of six. He said he had spent 1.2 million shekels ($338.8 million) building the family house that is now under threat.
Obeideh and other Sur Baher residents said they did not need Israel's permission to build their homes because they had received it from the Palestinian Authority, which since the Oslo interim peace deals of the 1990s exercises limited self-rule over parts of the West Bank.
"Everyone here is panicking - they put all of their savings into buying an apartment or building a house," said Idris Abu Tair, 62.
Intent to demolishThe pending demolition is the latest round of protracted wrangling over the future of Jerusalem, home to more than 500,000 Israelis and 300,000 Palestinians, and sites sacred to Judaism, Islam and Christianity.
In 1980, the Israeli parliament passed a law declaring the "complete and united" city of Jerusalem to be the capital of Israel including the eastern half that it captured in the 1967 Six-Day War.
But the United Nations regards East Jerusalem as occupied, and the city's status as disputed until resolved by negotiations between Israel and the Palestinians, who say that East Jerusalem must be the capital of a future Palestinian state.
Last month, Israeli authorities sent a "Notice of Intent to Demolish" to lawyers of the Sur Baher residents affected, informing them of the Supreme Court ruling.
The notice said the local military commander would carry out the demolition - and charge them for the cost - if the buildings were not torn down by July 18.
Palestinian officials said this week that the threatened structures lie within areas that they should control.
The Palestine Liberation Organization accused the Israeli court of aiming "to set a precedent to enable the Israeli forces to demolish numerous Palestinian buildings located in close proximity" to the barrier.
On Wednesday, Jamie McGoldrick, the United Nations humanitarian coordinator, and other U.N. officials called on the Israeli authorities to halt plans for demolitions.
They said 17 Palestinians faced displacement from the plans to level 10 buildings, including dozens of apartments.
The European Union issued a statement saying: "The continuation of this policy undermines the viability of the two-state solution and the prospect for a lasting peace."
But the Supreme Court's three-judge panel ruled unanimously in favour of demolition: "The petitioners took the law into their own hands when they began and continued building structures without receiving a special permit from the military commander."
The court said that construction close to the barrier could provide cover for attackers.
An IDF statement on Wednesday referred to the court's ruling, saying enforcement would be pursuant to "operational considerations" and "state policy."