Clashes in Al-Aqsa mosque, skirmishes in streets during Israeli flag march

Thousands of flag-waving Israeli nationalists marched through the Muslim quarter of Jerusalem's Old City on Sunday in a deeply divisive parade that Palestinian factions warned could re-ignite their conflict with Israel.

Police earlier fired stun grenades at Palestinians who pelted them with stones in the Al-Aqsa mosque compound as record numbers of Jews visited the holy site, some of them appearing to pray in defiance of a long-standing ban.

The annual Jerusalem procession celebrates Israel's capture of the Old City in the 1967 Middle East war and draws thousands of cheering, chanting participants to its narrow, stone streets.

"Death to Arabs," some youths shouted as they entered Damascus Gate, the main entrance to the Old City's Muslim neighbourhood. "An Arab is a son of a whore," one small group yelled out in front of Jerusalem's ancient walls.

Ahead of the march, police said 2,600 Jews toured Al-Aqsa esplanade, a record number for a single day.Some of the visitors wore religious garb and prostrated themselves. A few held up Israeli flags and sang the national anthem.

The preacher of the mosque, Sheikh Ikrima Sabri, denounced their behaviour. "What happened today in Al-Aqsa mosque hadn't taken place since 1967," he told Reuters, accusing the government of deliberately looking to escalate tensions.

The Islamist group Hamas, which governs the Gaza Strip, also condemned the scenes, which went viral on social media.

"The Israel government is fully responsible for all these reckless policies and the following consequences," senior Hamas official Bassem Naim told Reuters.

In recent years, Hamas has cast itself as a defender of Muslim Jerusalem. After weeks of confrontations last year over Palestinian evictions in the city, Hamas fired rockets into Israel during the march, triggering an 11-day war that killed at least 250 Palestinians in Gaza and 13 people in Israel.

As nationalists draped in Israel's blue and white flag gathered at Damascus Gate, a drone flew overhead trailing a Palestinian flag. A man rushed up to the crowds and waved another Palestinian flag at them before being dragged away.

Inside the city, small fights sporadically broke out. One Israeli youth was videoed using pepper spray on a Palestinian woman, leading to an exchange of punches and kicks. However, some marchers said they had come in peace.

"I know my neighbours aren't so happy that we're here, but we didn't come to annoy them, we came to be happy for Jerusalem," said Yair Sussman, 17, a Jewish seminary who studies at a school in the occupied West Bank.

Clashes were reported across the West Bank on Sunday, injuring at least 30 Palestinians, medics said.

Israel sees all of Jerusalem as its eternal and indivisible capital, while Palestinians want the eastern section as capital of their future state. Hamas, deemed a terrorist organisation by Western governments, sees all of modern-day Israel as occupied.

Palestinians view Sunday's march as an Israeli show of force and part of a broader campaign to bolster Jewish presence across the city. Read full story

However, Israeli Minister Naftali Bennett defended his decision to let the march go ahead, arguing that it had become an annual event. "Waving the Israeli flag in the capital of Israel is perfectly acceptable," he said on Sunday.

Israeli police repeatedly clashed with Palestinians in the Al-Aqsa compound in April, during the holy month of Ramadan, with Muslims angered by the rising numbers of Jewish visitors to the mosque esplanade.

Two weeks ago, the funeral of Al Jazeera journalist Shireen Abu Akleh, killed during an Israeli army West Bank raid, descended into chaos when police charged the mourners and yanked away Palestinian flags.

Al-Aqsa is the third holiest site in Islam. It is also revered by Jews as the Temple Mount - a vestige of their faith's two ancient temples.