At least four people were killed and more than 150 injured in a day of rioting in Jerusalem and the West Bank.
The worst clashes were at Jerusalem's Temple Mount compound - known to Muslims as Haram al-Sharif. The site is sacred to both Muslims and Jews.
The Palestinian leadership said Saturday would be a day of mourning throughout the Palestinian territories.
Palestinian leader Yasser Arafat is due to visit Cairo on Saturday to brief Egyptian President Hosni Mubarak on the clashes.
Bloodshed
Israeli riot police stormed the walled Temple Mount compound, which contains the Al-Aqsa mosque, to try to prevent Palestinians throwing stones at Jewish worshippers at the nearby Wailing or Western Wall.
After failing to push back the crowds of Palestinians, who had gathered in large numbers for Friday prayers, the Israeli police resorted to randomly firing live ammunition and rubber bullets.
The Palestinians' anger soon spread around the West Bank. Riots in Bethlehem and in and around Jerusalem left many more injured.
An Israeli soldier was also shot dead and another wounded by a Palestinian policeman in the West Bank town of Qalqilya.
The violence undermines hopes that Israel and the Palestinians will be able to reach a peace accord in the next few weeks.
Israeli police sources said about 30 Israeli policemen had been hit by stones. The Jerusalem police chief, Yair Yitzhak, was among the injured.
The violence erupted after a visit by Israel's right-wing leader, Ariel Sharon, to the Al-Aqsa compound two days ago.
Palestinians saw his visit as a provocative attempt to underline Israel's claim to permanent sovereignty over Jerusalem's holy sites, which Israel captured in the 1967 conflict.
The question of who has sovereignty over the area is now the critical issue stalling a peace accord.
Mutual recrimination
The two sides disagree over who started the violence.
Mr Arafat has not commented, but a Palestinian spokeswoman, Hanan Ashrawi, denied allegations that the Palestinians had been responding to a sermon preached during the Muslim prayers.
However, Israeli Prime Minister Ehud Barak argued on Israeli public radio that the clashes "did not start when the Likud delegation were there, but after that, as a result of incitement".
"I spoke today with Arafat and clarified to him that we cannot tolerate these attacks," he said. He also demanded "courageous and painful steps" by the Palestinians to achieve a peace deal.