Thousands of others entered the Haram al-Sharif compound, known to Jews as the Temple Mount, for prayers after Palestinians ended a boycott of the site the previous day.
Despite fears of violent clashes around the compound, which includes Al-Aqsa mosque and the Dome of the Rock, the area was largely calm following Friday's midday prayers.
Dozens of young Palestinians shouted and protested near one entrance to the compound and minor scuffles broke out with police.
A Palestinian also attempted to stab soldiers at a junction in the West Bank and was shot dead by Israeli forces, according to the Israeli army.
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Tensions at the holy site were high even after thousands of worshippers returned to the compound yesterday, ending a boycott over new security measures following an attack that killed two policemen that Israel eventually removed.
The outside prayers today were due to the Israeli age restrictions and were not the start of a new boycott.
Police said early in the day there were "indications that disturbances and demonstrations will take place today," prompting them to bar men under 50 from praying at Al-Aqsa.
Roads around Jerusalem's Old City, where the compound is located, were closed and some 3,500 police were deployed.
Police said they had also removed a number of people who attempted to stay inside Al-Aqsa mosque overnight.
"It is a cowardly act," Amjad Hassoun, a young man from Jerusalem who was walking near the Damascus Gate entrance to the Old City, said of the age restriction.
Yesterday, the Palestinian Red Crescent said 187 people were wounded inside the mosque compound and in adjacent areas of the Old City after clashes erupted, with police saying stones had been thrown at officers.
Amnesty International alleged Israeli security forces fired "stun grenades, tear gas and sponge-tipped bullets into a peaceful crowd" at an entrance to the compound.
Some 119 people were detained, according to the Palestinian Prisoners Club, adding that 21 were still in custody, including nine minors. The Prisoners Club alleged a number of them were beaten by police.
Muslims had in previous days refused to enter the compound and prayed in the streets outside after Israel installed the new security measures.
Palestinians viewed the move as Israel asserting further control over the site.
Israeli authorities said the measures, including metal detectors, were needed because the July 14 attackers smuggled guns into the compound and emerged from it to attack the officers.
Jordan, the custodian of Jerusalem's Muslim holy sites, welcomed the removal of the security measures but said Israel should not provoke Palestinians there.
"Unless Israel acts responsibly, then we'll be facing another crisis that will push us all towards the abyss," Jordanian Foreign Minister Ayman Safadi said in Cairo following a meeting of Arab foreign ministers on Thursday.
Deadly unrest had erupted in the days after the new measures were introduced, with clashes breaking out around the compound and in the occupied West Bank, leaving six Palestinians dead.
After intensive international diplomacy, Israel had removed the metal detectors on Tuesday.
Newly installed railings and scaffolding where cameras were previously mounted were also removed on Thursday.
The removal was seen as a defeat for Netanyahu, who had ordered the new security measures and was forced to backtrack after warnings the unrest could spiral out of control.