The idea to install the cameras emerged during separate talks late last week between US Secretary of State John Kerry and the three sides with a stake at the shrine Israel, Jordan and the Palestinian self-rule government. Kerry was looking for a way to lower tensions, but it's not clear if video cameras will suffice.
The current round of violence began in mid-September, triggered in part by heated disputes over the Jerusalem shrine.
Under decades-old arrangements, Jews are allowed to visit, but not to pray at the shrine.
However, the number of Jewish visitors has doubled in the past five years, accompanied by statements from Jewish groups and several leading Israeli politicians demanding prayers at the site.
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Such statements have fueled Palestinian fears that Israel is trying to expand its presence at the shrine. Israel adamantly denies such allegations, saying they amount to incitement to violence.
The confrontations quickly spread. In all, 11 Israelis have been killed, mostly in stabbings, while 52 Palestinians, including 30 said by Israel to be attackers, have been killed by Israeli fire.
Under the compromise brokered by Kerry, video cameras are to be installed inside the 37-acre (15-hectare) walled platform to help defuse tensions.
The details are to be worked out between officials from the site's administrator - the Islamic Trust, or Waqf - and Israeli authorities, said a senior Jordanian government official, who spoke on condition of anonymity in line with briefing regulations.