Authorities said 17 officers were hurt in the unrest late on Friday, which saw violence erupt at the Al-Aqsa Mosque, Islam’s third-holiest site.
The clashes broke out amid growing anger over the potential eviction of Palestinians from homes on land claimed by Jewish settlers, which has sparked alarm from the United Nations, European Union and the Gulf Cooperation Council.
Police used rubber bullets and stun grenades against Palestinians throwing rocks near the mosque, while a water cannon was used to disperse those gathering near homes under threat in east Jerusalem.
One Palestinian lost an eye, two suffered serious head injuries and another two fractured jaws during the night of clashes, authorities said.
More than 100 were hospitalised with injuries, including many who had been hit with rubber-coated metal bullets, according to the Palestine Red Crescent.
The clashes came amid soaring tensions in the city at the centre of the Israeli-Palestinian conflict.
At the beginning of the holy month of Ramadan in mid-April, Israel blocked off a popular gathering spot where Palestinians traditionally socialise at the end of their day-long fast, in a move which sparked two weeks of clashes before Israel lifted the restrictions.
But in recent days, protests have grown over Israel’s threat to evict dozens of Palestinians who have been embroiled in a long legal battle with Israeli settlers trying to acquire property in the neighbourhood of Sheikh Jarrah in east Jerusalem.
After tens of thousands of Palestinians packed into the hilltop compound surrounding the Al-Aqsa mosque – known to Muslims as Noble Sanctuary and to Jews as Temple Mount – on Friday for prayers, many stayed on to protest against the evictions.
Following the evening meal that breaks the Ramadan fast, clashes broke out at Al-Aqsa.
Smaller scuffles took place near Sheikh Jarrah, where numerous Palestinian families face eviction, which sits near the walled Old City’s Damascus Gate.
Police used a water cannon mounted on armoured vehicles to disperse several hundred protesters gathered near the homes of families facing potential eviction.
A police spokesperson said Palestinians threw rocks, fireworks and other objects towards officers, with about half of those injured needing hospital treatment.
Violence and deaths have been recorded in recent days involving Israeli military and Palestinians, with two Palestinians shot dead by troops after they opened fire on an Israeli base in the occupied West Bank.
Earlier in the week, a 16-year-old Palestinian was killed near the West Bank city of Nablus. The military said several Palestinians had thrown firebombs toward soldiers.
On Friday, mourners also held a funeral near Bethlehem for a 60-year-old Palestinian woman who was shot while trying to stab soldiers in the West Bank earlier in May.
Additional reporting by agencies