The Israeli army has removed an officer from his post over allegations he ordered a soldier to fire a rubber-coated bullet into the foot of a bound and blindfolded Palestinian.

A military spokeswoman said a decision on legal proceedings against Lieutenant-Colonel Omri Borberg is expected soon.

Borberg, a regimental commander, was suspended last month pending a military investigation.

He could still face prosecution, but B'Tselem, an Israeli human rights group, said on Wednesday that a deal in which he could face the minor charge of inappropriate behaviour was "disgraceful".

The incident took place four weeks ago in the West Bank village of Ni'lin during protests against the construction of Israel's separation wall in and around the occupied Palestinian territory.

The shooting was filmed by a Palestinian girl and released by B'Tselem.

Borberg said he told the soldier only to shake his rifle to frighten the Palestinian, according to initial army findings.

On Wednesday, Israel released five Palestinian teenagers from jail - ending the last stage of its prisoner swap with Hezbollah.

Ehud Olmert, the Israeli prime minister, said 150 more prisoners will be freed later this month, in an attempt to revive peace talks with the Palestinians.