The clash after morning prayers came as demonstrators protested over Orthodox Jews going to the esplanade, which is holy to both Islam and Judaism.
On Wednesday there were similar clashes as youths threw stones and fired flares at police after Jewish visitors ascended to the compound on the eve of the week-long holiday of Sukkot, or the Feast of Tabernacles.
Police spokesperson Luba Samri said that on Monday, youths again threw stones and incendiary objects at security forces and set up makeshift barricades.
When police began to disperse them, the protesters took refuge inside al Aqsa mosque, which the Israeli police are not authorised to enter, she said.
The site is the scene of frequent clashes between police and Palestinian youths, who object to what they see as an attempted Jewish and Israeli takeover of the site that is administered by Jordanian and Palestinian Muslim authorities.
Monday's visit to the area by the Orthodox Jews eventually went ahead without further incident, police said.
The West-Bank based Palestinian Authority denounced the visit as a "new act of ongoing provocation... while Palestinians are being barred from entering the compound".
UN Secretary General Ban Ki-moon, on a trip to Ramallah on Monday, said he was "deeply concerned by repeated provocations at the holy sites in Jerusalem. These only inflame tensions and must stop."
The site houses Islamic holy sites the Dome of the Rock and the al Aqsa mosque and is revered by Jews as the location of the biblical Jewish temple, considered Judaism's holiest place.
Non Muslim visits to the al Aqsa complex are permitted and regulated by police, but Jews are not allowed to pray at the site for fear it could trigger major disturbances.
Jews pray instead at the Western Wall below.
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