Israeli police Sunday allowed Palestinians to access a promenade around Jerusalem's Israeli-annexed Old City, an AFP reporter said, in a move apparently aimed at easing tensions after days of clashes.

A few hundred Palestinians held a rally at the Damascus gate and police allowed them to remove barricades blocking access to the promenade, an AFP correspondent said. Police used a bullhorn to announce the area was open to all.

Police, who had insisted the Damascus gate barricades were necessary, said Sunday that Commissioner Kobi Shabtai had ordered the removal of the barricades.

The decision came "following consultations with local leadership, religious leadership, situation assessments, while taking into consideration the shop owners who need to make a living, and in order to lower the level of violence," a spokesman told AFP.

"Our forces are still deployed on the ground, and we won't let violence resurge," he said.

A group of Palestinians celebrating the removal of the barricades and waving a Palestinian flag was chased away by police, AFP reporters said.

But the plaza remained open, with heavy police presence at the site.

There have been nightly disturbances since the start of the Muslim holy month of Ramadan on April 13, amid Palestinian anger over the blocked access.

A series of videos posted online have shown young Arabs attacking ultra-Orthodox Jews, and Jewish extremists taking to the streets to bully Arabs.

Tensions rose on Thursday when far-right Israeli demonstrators, enraged by a wave of Palestinian attacks on Jews in Jerusalem, marched to the Old City with chants of "death to Arabs".

Over 100 Palestinians were wounded in clashes with police and dozens were arrested.

The violence was the worst in years between Israeli police and Palestinians in the disputed Holy City, with Palestinians throwing stones and bottles at officers, who responded with stun grenades and water cannons.

Skirmishes broke out again on Friday after Muslim worshippers left Jerusalem's revered Al-Aqsa mosque following night prayers.

Palestinians had also targeted Jewish passers-by and motorists in and around east Jerusalem during the night riots, beating them and stoning their cars, with many of the attacks being posted on social media.

Jewish extremists in return took to the streets to bully Arabs, with police arresting dozens involved in the attacks.

Later Sunday, Palestinian militants fired a projectile "from the Gaza Strip into Israeli territory," the Israeli army said.

"An alert was activated in open areas only," a statement from the military said, without providing further details.

Overnight Friday into Saturday, Palestinian militants in Gaza fired dozens of rockets at southern Israel, with the military wing of Hamas, the Islamist rulers of the Palestinian enclave, voicing support for the east Jerusalem protesters.