Scuffles have broken out in the town of Nazareth in northern Israel after three Israelis set off firecrackers in the Church of the Annunciation.
The incident during a service late on Friday caused panic among worshippers and sparked angry protests outside.
The three intruders were taken away for psychiatric checks as police sought to disperse large crowds.
Christians believe the church, one of their holiest sites, marks the place where the birth of Jesus was foretold.
Internal Security Minister Gideon Ezra told Israel radio it "was not a (terrorist) attack and there was no specific intention to harm the Church of the Annunciation".
The three intruders were a man and his wife, and a woman who Israeli media said was their daughter.
The man was known by police to suffer from mental illness and to have threatened to attack churches in the past, officials said.
The three entered the church pushing a pram filled with fireworks and small gas canisters and began throwing them, reports said.
The intruders used a pram filled with fireworks
This sparked panic among worshippers, some of whom were said to have attacked the group.
Mr Ezra, in Nazareth at the time, said the intruders threw something that made a "huge noise" into the church, and the police came to defend them from the anger of the crowd.
An eyewitness, Rouan, said she heard a "boom".
"It went on for six or seven minutes," she was quoted by the Associated Press as saying. "I thought we were going to die."
The blast caused black marks on the walls, but no major damage, she said.
Hundreds of people then gathered outside the church to protest against the incident, preventing the three from leaving for several hours.
At least two protesters and five policemen were hurt in clashes before security forces fired tear gas to disperse the crowds.
The BBC's James Reynolds in Jerusalem says that whatever their exact motive, the three will have known that any kind of provocation inside one of the most important Christian sites in the Middle East is bound to attract attention and cause unrest.
The Church of the Annunciation marks the place where Christians believe the Angel Gabriel appeared to Mary to foretell the birth of Jesus.