People run from tear gas fired by Israeli security forces at the Al Aqsa Mosque compound in Jerusalem on Sunday. Ahmad Gharabli/AFP

Palestinian worshippers clashed with Israeli police at a highly sensitive Jerusalem holy site on Sunday as an Israeli holiday coincided with the final days of the Muslim holy month of Ramadan.

Muslim worshippers at the Al Aqsa mosque compound were angered over Jewish visits to the site holy to both religions.

According to police, protesters barricaded themselves in the mosque, from where they threw chairs and stones at forces who "dispersed" them.

A member of the Israeli security forces gestures at Al Aqsa Mosque compound in Jerusalem on Sunday. AFP

The Muslim Waqf organisation which oversees the site said police used rubber bullets and pepper spray, adding that two people were arrested.

After the clashes, police spokesman Micky Rosenfeld said calm had returned and visits were continuing.

The incident took place as Israelis marked Jerusalem Day, which commemorates the country's capture of the city's mainly Palestinian eastern sector in the 1967 Six-Day War.

This year's holiday coincided with the final days of Ramadan, the Muslim month of fasting.

The Al-Aqsa compound, known to Jews as the Temple Mount, is located in east Jerusalem.

Sunday's visit was the first time since Tuesday that Jews were allowed into the site, according to activists.

Palestinians chant slogans at the Al Aqsa Mosque compound in Occupied Jerusalem. Ahmad Gharabli/AFP

Jews are allowed to visit the site during set hours but not pray there to avoid provoking tensions. Jewish visits to the site usually increase for Jerusalem Day.

Later on Sunday, tens of thousands of Israelis were expected to mark the day by marching through the city, culminating in celebrations at the Western Wall, which is below the Al-Aqsa compound.

The wall is the holiest site where Jews can pray.

Following its seizure in 1967, east Jerusalem was annexed by Israel in a move never recognised by the international community.

Israel proclaims the entire city as its united capital, while the Palestinians see the city's eastern sector as the capital of their future state.

Agence France-Presse