A police officer stands guard at the Palestinian Authority side of the Erez Crossing in Beit Hanoun in the northern Gaza Strip on Saturday. AFP

"Following the rockets fired toward Israeli territory from the Gaza Strip last night, it was decided that crossings into Israel for Gazan merchants and workers through the Erez Crossing will not be permitted this upcoming Sunday," said COGAT, a unit of the Israeli defence ministry responsible for Palestinian civil affairs.

"The re-opening of the crossing will be decided in accordance with a security situational assessment," COGAT said.

Employment in Israel is a lifeline for people in Gaza, where according to a recent World Bank report nearly half of the 2.3 million population is unemployed.

There are currently 12,000 Gazans with permits to work in Israel, and the government recently announcing its intention to add another 8,000.

Israeli police carry a wounded young Palestinian demonstrator at Al Aqsa mosque compound on Friday. AFP

The Palestinians denounced the move as "collective punishment" of the impoverished territory's 2 million residents, who have lived under an Israeli-Egyptian blockade since Hamas seized power from rival Palestinian forces nearly 15 years ago.

The Gaza workers union said the closure was "collective punishment” and would hurt the already suffering economy, where unemployment hovers around 50%. It said the timing of the closure, just before the Eid Al Fitr holiday marking the end of the holy month of Ramadan, would compound the pain for families struggling to make ends meet.

Sami Amassi, the head of the union, said the permits themselves were meant to "exploit” the workers for political purposes, rather than improve their lives.

Medics from the Palestinian Red Crescent assist an injured journalist at the Al Aqsa Mosque complex. AFP

Hamas spokesman Hazem Qassem said the move "aims at tightening the siege and is a form of aggression that we cannot accept.”

"This will not succeed. The police of collective punishment against the Palestinians has always proven to fail," he told

More than 200 people, mostly Palestinians, have been wounded in clashes in and around Al Aqsa in the past week.

Palestinians have been outraged by massive Israeli police deployment and repeated visits by Jews to the holy site.

Saturday morning prayers, however, passed without incident, with Israeli officials estimating that 16,000 Muslims took part.

Agencies