Some 90,000 Palestinians from around the country walked to the Al Aqsa mosque to mark Laylat al-Qadr (Night of Destiny), a peak of the Muslim holy month of Ramadan, after Israeli forces stopped cars and buses, according to footage that surfaced online.
Images shared across social media showed rows of worshippers standing in prayer along the Al Aqsa mosque plaza.
Hamas, which rules Gaza, urged Palestinians to remain at Al-Aqsa until Ramadan ends, warning that "the resistance is ready to defend Al-Aqsa at any cost".
Meanwhile, Israeli police used water cannons to disperse protests in the Sheikh Jarrah neighbourhood where Palestinian families have faced days of forced expulsions by Israeli settlers.
Palestinians have held nightly protests in Sheikh Jarrah against an attempt by Israeli settlers to take over Arab homes.
On Saturday, protesters chanted, waved Palestinian flags and threw stones before police moved in.
The United States - a staunch Israeli ally whose tone has toughened under US President Joe Biden - said it was "extremely concerned" and urged both sides to "avoid steps that exacerbate tensions or take us farther away from peace".
"This includes evictions in east Jerusalem, settlement activity, home demolitions and acts of terrorism," the State Department said.
The European Union called on the authorities "to act urgently to de-escalate the current tensions," saying "violence and incitement are unacceptable and the perpetrators on all sides must be held accountable".
Russia voiced "deep concern" and called the expropriation of land and property in the occupied Palestinian territories including east Jerusalem "a violation of international law".
Palestinian president Mahmoud Abbas said he held the Israeli government responsible for the unrest and voiced "full support for our heroes in Al-Aqsa”.
'Barbaric attack'
More than 200 people were when Israeli riot police stormed the mosque compound late on Friday, firing tear gas and rubber-coated bullets at thousands of worshippers gathered in the last days of the Muslim holy month of .
Dozens of Israeli riot police entered the Al-Aqsa compound, also known as the Temple Mount, on Friday evening as thousands of Muslim worshippers were holding evening prayers on the last Friday of Ramadan.
The violence in Al-Aqsa drew sharp rebukes across the Arab and Muslim world.
Jordan condemned Israel's "barbaric attack" and Egypt, Turkey, Tunisia, Pakistan and Qatar were among Muslim countries that blasted Israeli forces for the confrontation.
Israel also drew criticism from Bahrain and the United Arab Emirates, two countries that signed normalisation accords with the Jewish state last year.
Iran called on the United Nations to condemn the Israeli police actions, arguing that "this war crime once again proved to the world the criminal nature of the illegitimate Zionist regime".
Tensions are expected to remain high in Jerusalem.
Israel's supreme court is to hold a new hearing in the Sheikh Jarrah case on Monday, when Israelis mark Jerusalem Day to celebrate the "liberation" of the city.
Agencies contributed to this report.
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