Palestinians celebrated as police barriers came down outside Jerusalem's Damascus Gate Sunday night, allowing them access to a square that's a popular meeting place during the holy month of Ramadan.
Thousands filled the East Jerusalem plaza, many waving Palestinian flags.
Scuffles broke out, however, as Israeli police waded into the crowd to confiscate the flags.
Clashes in the holy city followed the start of Ramadan nearly two weeks ago.
Youth protesters threw stones at police in riot gear who tried to disperse them using horses and foul-smelling water.
Anger spilled into the occupied West Bank over the Israeli police decision to prevent crowds from gathering outside of the historic Damascus Gate.
Israeli-Arab lawmaker Ahmad Tibi said blocking the site was wrong.
"The one who took the decision to close it was mistaken. The decision to re-open is right, Now they stopped aggression against Palestinians.”
Violence peaked last week when Palestinian medics said 100 people were injured as Israeli police arrested more than 50 protesters.
Hundreds of ultra-nationalist Israelis marched through Jerusalem chanting “Death to Arabs” and rockets were fired from Gaza into Israel.
Clashes subsided over the weekend and the barriers were taken down after international appeals for calm.
Palestine and Israel stake claim over East Jerusalem, annexed by Israel in the late 1960s, and considered by Palestinians as the capital of a future Palestinian state.