The Old City is home to Al-Aqsa Mosque which is the third holiest site in Islam.
The Palestine Red Crescent Society said in a statement that at least 105 Palestinians were injured, including 22 people who were hospitalized.
Earlier on Thursday, some 300 members of the supremacist Lehava group took part in the march.
The group is best known for its use of intimidation, harassment and violence to stop intermarriage and assimilation of Jews with non-Jews, and tries to stifle any public activity by non-Jews in the Occupied Territories, including coexistence events.
Lehava protestors, led by itsfar-right chief Benzi Gopstein, who professes violence, racism, and terror, chanted “Death to the Arabs!” and “Arabs get out!”
Israeli forces purportedly attempted to block the extremist settlers from reaching Palestinians, but they eventually used stun grenades, tear gas and water cannons against the Palestinian activists.
Some 20 officers were reportedly injured in the clashes, including a mounted officer hit in the face by a rock. Three were taken for medical treatment.
Video footage circulating on social media showed police and hundreds of protesters running through the streets as the sound of stun grenades echoed in the background.
A video from the scene showed far-right Israeli youths attacking a Palestinian home just inside the Old City of Jerusalem al-Quds.
The sounds of children crying can be heard as a woman, unseen, shouts “Stop” in Arabic while several youths throw objects at the home.
Palestinian Authority President Mahmoud Abbas condemned the violent clashes late Thursday in Jerusalem al-Quds, saying he “holds the Israeli Occupation fully responsible for this serious deterioration.”
“Settlers and extreme right-wing groups are encouraging the killing of Arabs with the protection of the Israeli army and police,” Abbas said in a statement.
Palestinian Authority Prime Minister Mohammad Shtayyeh also called the actions of the Arab youth heroic.
“The scenes of heroism emerging from the streets and alleys of the city of al-Quds tonight of the defenseless al-Quds youth with willpower and resolve as they stand up to settler attacks, confirm once again the failure of Israeli plans to Judaize the Holy City,” Shtayyeh said.
Hamas resistance movement also condemned the Tel Aviv regime for the clashes, calling it an Israeli plot against the sacred Al-Aqsa Mosque.
Haniyeh: Our people in al-Quds not alone
Hamas resistance movement condemned the Tel Aviv regime for the clashes, calling it an Israeli plot against the sacred Al-Aqsa Mosque.
“Our people in al-Quds (Jerusalem) are not alone in their battle of identity and willpower. We will continue to defend our land, sanctities and nation, and embody its Arab and Islamic identity, which the Occupation is trying to obliterate and end,” the Arabic-language Safa news agency quoted Ismail Haniyeh, the head of the political bureau of Hamas, as saying in a statement.
He noted that Hamas is closely monitoring the ongoing developments in the occupied city of Jerusalem al-Quds, and confrontations between Palestinian activists and Israeli military forces as the latter continue to storm the sacred al-Aqsa Mosque and its surrounding area.
Haniyeh then called on all Palestinians to stand up and support al-Quds residents in their heroic defense of the city and its holy sites.
“What is happening in the Holy City now is an affirmation of the Arab, Islamic and Palestinian essence of this city, and that it cannot submit to the occupation or accept it and its fascist policies,” Ismail Haniyeh, head of the political bureau of Hamas, said.
Israeli newspaper Haaretz reported that Israeli far-right organizations had used WhatsApp groups to call on protesters to carry guns, while posting instructions on how to avoid arrest.
The newspaper reported that in a group chat organized by the right-wing group La Familia, a user posted “Burning Arabs today, Molotov cocktails are already in the trunk…the way I see it, an Arab dies today.”
Jerusalem al-Quds has seen several days of violence after a video was posted to TikTok of an ultra-orthodox Jewish man being slapped - seemingly at random - on light rail train in the city.
Along with the tensions, the holy occupied city has seen regular clashes over the past week between Palestinian residents and Israeli military forces, who have been blocking Palestinians from sitting on the steps of Damascus Gate.
This is while thousands of Palestinians traditionally sit in the area following nighttime prayers during the holy Muslim fasting month of Ramadan.
Israel lays claim to the entire Jerusalem al-Quds, but the international community views the city’s eastern sector as occupied territory and Palestinians consider it the capital of their future state.
United Nations Security Council Resolution 478, adopted on August 20, 1980, prohibits countries from establishing diplomatic missions in Jerusalem al-Quds.
Palestinians, who seek an independent state in the occupied West Bank and Gaza, with East Jerusalem al-Quds as its capital, have condemned the US pro-Israel agenda.