A Palestinian wounded by Israeli army gunfire on the outskirts of Jerusalem died in hospital on Friday night after a day of clashes in and around the holy city, medics said.

Ramallah hospital emergency room staff said that Tareq Arumi, 23, was hit in a clash with troops during the afternoon in protests in the West Bank neighbourhood of Al-Ram, adjacent to Israeli-annexed east Jerusalem.

Palestinians said that the Al-Ram unrest broke out as stone-throwers battled Israeli police at the flashpoint Al-Aqsa mosque compound in Jerusalem´s Old City and neighbouring districts.

The army said that first reports indicated that a soldier opened fire with live ammunition, hitting Arumi in the shoulder.

"An initial investigation suggests that a Palestinian man fired fireworks at soldiers from several metres (yards) away, putting the soldiers´ lives in danger," a spokesman said.

"The soldier responded by firing, injuring the Palestinian in his shoulder."

At Al-Aqsa there were clashes between riot police and "hundreds" of Palestinian stone-throwers, police said.

Police said they used stun grenades to disperse the demonstrators and that four people had been arrested and 11 officers were "lightly injured from stones."

They said that another Palestinian was arrested at the nearby east Jerusalem neighbourhood of Issawiya during stone-throwing at police there.

In the Gaza town of Khan Yunis, thousands of Palestinians also marched in support of Palestinian sovereignty in Jerusalem, over which Israel claims sole dominion while the Palestinians claim the mainly Arab east for the capital of a Palestinian state.

The Al-Aqsa plaza is one of the most sensitive places in the Middle East. It is referred to by Muslims as Haram Al-Sharif and considered the third holiest site in Islam, while it is known to Jews as the Temple Mount and is revered as Judaism´s most sacred site.

Witnesses told AFP police had also fired tear gas, forcing a number of women to run for cover inside the adjacent Dome of the Rock.

"We were praying when they started shooting tear gas towards us," 58- year-old Umm Mohammad told AFP by telephone from inside the Dome of the Rock.

"At first, they were shooting at the Al-Aqsa mosque but we hid in the Dome of the Rock, and now they have started firing tear gas and sound bombs towards the gates," she said.

"Women were terrified and screaming at first, but we got over it and started shouting ´Allahu Akbar´ (God is greatest)," she said.

The clashes followed nearly a week of unrest at the walled complex. On Sunday, police used tear gas to disperse Palestinians who were throwing stones inside the compound, arresting 18 people.

Similar clashes erupted on Tuesday when two people were arrested after protesters hurled stones and shoes at police escorting Jewish and Christian visitors, leaving one officer slightly injured, police said.

And on Thursday, police arrested seven Palestinians for shouting insults at a group of Jews touring the site, fearing the confrontations would lead to further clashes. (Copyright © 2012 Agence France Presse. 02/24/12)