Clashes broke out in the Sheikh Jarrah neighbourhood of occupied East Jerusalem on Sunday as a far-right politician paid a visit to support Israeli settlers.
The Palestinian neighbourhood became a focal point for protests before the Gaza war last May.
Riot police on Sunday set up roadblocks and used stun grenades, water cannon and mounted officers to disperse crowds who had gathered in the area’s residential streets.
Barricades surrounded a courtyard where parliamentarian Itamar Ben-Gvir, from the far-right Religious Zionism alliance, and his supporters had set up a makeshift office decorated with Israeli flags.
Mr Ben-Gvir sat between a Palestinian home, the residents of which are facing imminent eviction, and one where Israeli settlers live.
He said the move was a response to an alleged arson attack on the settlers’ home on Friday. He urged Israelis to join him and dozens gathered nearby.
Scuffles broke out when Israeli MPs from the Arab-led Joint List, Ofer Cassif and Ahmad Tibi, arrived to visit the neighbouring Palestinian residents.
Paramedics and ambulances were stationed around the neighbourhood, with Palestinian media reporting dozen of people wounded.
Some people threw stones and fireworks during the clashes and police said at least 12 suspects had been arrested.
Mr Ben-Gvir has previously visited Sheikh Jarrah in support of his fellow settlers, including last May amid mass protests against the pending eviction of Palestinian residents.
The period marked the worst violence the city has seen in years and preceded a devastating 11-day war fought between Israel and Gaza militants.
The EU on Sunday said it was “concerned” about the situation in Sheikh Jarrah.
“Incidents of settler violence, irresponsible provocations and other escalatory acts in this sensitive area only fuel further tensions and must cease,” said the bloc’s delegation to the Palestinians.
The presence of settlers in Palestinian territory, which Israel has occupied since 1967, is considered to be illegal under international law.
Israel disputes this and allows Jews to reclaim property in East Jerusalem, if they hold deeds proving ownership before the establishment of Israel in 1948.
Palestinians are banned from reclaiming property they owned in what became Israel.
Far-right Israelis last rallied in Sheikh Jarrah in December, after an Israeli woman was stabbed in the area allegedly by a Palestinian girl.
Tension also flared in the neighbourhood last month, when Israeli authorities evicted a Palestinian family overnight and demolished their home.
The municipality said it was expropriating the land to build a school.
