Until now, it was believed that most of Jerusalem's water during that period reached the city directly from the Gihon Spring, which runs from lower Silwan.
The items discovered, near an altar of a temple, include ritual pottery vessels, fragments of chalices and figurines of animals.
The discoveries were made outside Jerusalem at Tel Motza, during archaeological excavations conducted in the Jerusalem Archaeological Garden, taking place ahead of new highway construction in the area, the Hareetz newspaper reported.
"The exposure of the current reservoir, as well as smaller cisterns that were revealed along the Tyropoeon Valley, unequivocally indicates that Jerusalem's water consumption in the First Temple period was not solely based on the output of the Gihon Spring water-works, but also on more available water resources, such as the one we have just discovered," Eli Shukron, the excavation director was quoted by the newspaper as saying.
The finding revealed a number of earlier structures, which were demolished in order to construct the channel, along with the street above the channel, and what appears to be parts of the Western Wall.
"Presumably the large water reservoir, which is situated near the Temple Mount, was used for the everyday activities of the Temple Mount itself and also by the pilgrims who went up to the Temple and required water for bathing and drinking," Chief archaeologist of the Nature and Parks Authority and an expert on ancient water systems Dr Tvika Tsuk said.
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Discoveries from the First Temple period in Jerusalem are relatively rare, compared to findings from later periods.
The First Temple Period dates from 1006 BC to 586 BC.