Mayor Ron Nahman said: 'The building work has begun in our sector and shows that Ariel is being included within the barrier and is an integral part of Israel.'
Ariel is the second-largest Israeli settlement in the West Bank with 18,000 inhabitants. Many Palestinians accuse Israel of using the project to swallow up large parts of the West Bank which were intended for a Palestinian state.
Washington has voiced opposition to adding Ariel to Israel by means of the barrier, and Israel has avoided making a clear decision. The US confirmed on 14 June that it is involved in ongoing talks with Israel on how to solve the problem.
Palestinian Cabinet minister Saeb Erekat said building a barrier around Ariel would 'mean the destruction and devastation of the road map,' the peace plan envisioning a Palestinian state next year, due to the confiscation of Palestinian land.
Construction of the separation barrier began in 2003. It is a system of trenches, fences, walls and razor wire which winds through the West Bank, at times making deep inroads into the territory claimed by the Palestinians.