Scores of people have been injured as thousands of Palestinians took to the streets in East Jerusalem in anger against Israeli plans to expand Jewish settlements in disputed areas.
Police were among the wounded during clashes in what militant Islamist group Hamas called a "day of rage", the ABC reports.
The violence erupted throughout East Jerusalem, where Israel plans to build hundreds more homes for Jewish settlers.
The ABC says the flashpoint was the reopening of a restored 17th-century synagogue close to the Al-Aqsa mosque in Jerusalem's Old City.
Rival Palestinian factions united in condemning the opening of the Hurva synagogue, which was last destroyed 62 years ago in fighting with Jordan during the 1948 war that followed Israel's creation.
As the riots escalated, Palestinians threw rocks at police and set tyres ablaze. Police responded with tear gas and rubber bullets. Some reports say as many as 100 people were injured and dozens arrested.
Clinton affirms Israel bond
US Secretary of State Hillary Clinton has dismissed the idea that US-Israeli relations are in crisis amid a row over Jewish settlers in Arab East Jerusalem.
She said the two nations had a "close, unshakeable bond" but made clear the US wanted both Israel and the Palestinians to prove their commitment to peace.
Earlier, US envoy George Mitchell postponed a planned visit to Israel.
Mr Mitchell had been due in Israel to try to set up the resumption of indirect peace talks between Israel and the Palestinians, but the trip has been postponed.
Israel's announcement that it planned to build 1600 more homes in East Jerusalem left the plan to renew talks in tatters, the BBC reports.
A US State Department official said that as Mr Mitchell continued internal discussions in Washington, there was no longer time for him to visit the region before a meeting of the Middle East Quartet in Moscow on Thursday.
However, Mr Mitchell remained in contact with Israeli and Palestinian leaders and expected to meet them soon, the official said.