Palestinian officials on Tuesday accused Israel of triggering violence in East Jerusalem to justify a crackdown and to tighten its grip on the disputed city, one even warning of a "battle of Jerusalem", Reuters reported.
Palestinian leaders have issued dire warnings in the past week after clashes at al-Aqsa mosque in Jerusalem's Old City between Israeli police and Palestinian protesters, over alleged attempts by Jewish religious activists to enter the site.
The compound housing the mosque is a holy place for both Muslims and Jews, and has often been a flashpoint of tension. Israeli security forces control access to the area and regularly prohibit young Muslim men from entering.
Mohammad Dahlan, a leader in Palestinian President Mahmoud Abbas's Fatah faction, said Israeli Prime Minister Benjamin Netanyahu "has opened the battle of Jerusalem". He stressed Fatah was seeking "peaceful activities", but warned of an "explosion in the region".
He compared the week's events to violence that erupted after Israeli right-winger Ariel Sharon visited the site in 2000, triggering a Palestinian uprising against Israel.
"Israel is lighting matches in the hope of sparking a fire, deliberately escalating tensions in occupied East Jerusalem rather than taking steps to placate the situation," chief peace negotiator Saeb Erekat said in a statement.
"Israel is escalating tensions in order to further entrench its occupation of East Jerusalem," Erekat said.
Israel's Jerusalem Mayor Nir Barkat said violence helps no one and that Israel must "isolate and stop the sources of violence" to allow life in the city to continue as normal.
"It's not in the world's interest, in Israel's interest or the Palestinian interests. Quiet is in the interest of all. The provocateurs must be shown that their efforts won't pay off," Barkat said on Israel Radio.
Israeli police arrested late on Tuesday Raed Salah, a leader of the Islamic Movement in Israel, who in the past has been indicted for inciting violence. Police said Salah was arrested for making inciteful and seditious remarks in recent days.
About 70,000 people marched in the streets of Jerusalem on Tuesday, marking the Jewish holiday of Sukkot, police said.
A police spokesman said the city remained calm despite the large crowds, with only a couple of isolated incidents in which no one was hurt or arrested.
Palestinian sources say they fear that "small brushfires" may quickly spiral out of control as they have done in the past, if the Israelis maintain a "heavy-handed" response instead of making an effort to de-escalate tensions.
Abbas's Western-backed government on Monday said it would "confront Israel" diplomatically over the rise in tension.
Obama's peace envoy George Mitchell is due back in Jerusalem this week to continue efforts to revive stalled peace talks between Abbas and Netanyahu.