Israel on Saturday agreed to install surveillance cameras at the highly sensitive holy site after an intense diplomatic drive to calm spiralling violence that many fear heralds a new Palestinian intifada.
However the Jordanian-run trust which administers the site, known as the Waqf, complained that when its officials showed up to install the cameras, they were blocked by Israeli police, accusing the Jewish state of "interference".
Prime Minister Benjamin Netanyahu said in a statement that arrangements to install the cameras "were supposed to be coordinated at the professional level".
The latest violence flared in September as Muslims protested an increase in Jewish visitors to Al-Aqsa, fuelling long-running fears Israel wanted to change the rules governing the compound allowing Jews to visit, but not to pray there.
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This spiralled into a series of knife attacks and shootings by young Palestinians that has left eight Israelis dead since October 1.
On Monday a Palestinian man stabbed an Israeli soldier in the neck in the southern West Bank before being shot dead by soldiers, the army said.