Violence linked to influx of Jewish settlers into Silwan in recent years, angering its 60,000 Palestinian residents.
Palestinians have clashed with Israeli police in the East Jerusalem neighbourhood of Silwan, in the latest flaring of tensions in the area.
Confrontations were sparked after Israeli police amassed at the entrance to Silwan following Friday prayers.
Youths threw stones at Israeli police in riot gear, who shot tear gas canisters at them during the altercation.
No injuries were reported.
Reuters video footage showed masked youths attacking an Israeli car with rocks, breaking its windows. The protesters blocked the neighbourhood’s main road with garbage bins, which they then set alight.
An Israeli police spokesperson said police were looking into the report.
About 500 Jewish settlers have moved into Silwan in recent years, angering its 60,000 Palestinian residents.
In September, an Israeli security guard working for a small Jewish settlement shot dead a local Palestinian after he said he came under attack from stone-throwing adults.
The killing triggered riots across East Jerusalem that went on for days.
In October, tensions spiked again after a local settler leader – who later said he had simply panicked – drove his car through a group of rock-throwing boys, knocking one over.
Israeli human rights group B’Tselem say police have detained at least 81 minors in the past year after street clashes, and accuse the authorities of exceeding the law by handcuffing minors and only advising parents after they have been questioned.
Israel considers all of Jerusalem its “eternal and united capital” but has not won international recognition of its claim.
The Palestinian Authority says it wants East Jerusalem as the capital of the state it hopes to establish in the West Bank and Gaza Strip.
The future of Jerusalem is a major bone of contention in peace talks re-started by the US administration in late 2007. About 500,000 Jews and 260,000 Palestinians live in the city.