Earlier in the day, Israeli settlers and Palestinians clashed on a street in the east Jerusalem neighborhood of Sheikh Jarrah where Palestinian families are fighting a court-ordered eviction.
Israeli police said 18 officers were wounded while the Palestinian Red Crescent reported that 205 Palestinians were injured in the violence at Al-Aqsa and across annexed east Jerusalem, including more than 80 who were hospitalised. At one point, the police entered one of the buildings in the complex, which includes the Al-Aqsa mosque and the iconic golden Dome of the Rock. The Palestinian Health Ministry said 83 people were wounded by rubber-coated bullets, including three who were shot in the eye, two with serious head injuries and two with broken jaws.
An Aqsa official appealed for calm on the compound through the mosque's loudspeakers.
The recent weeks have seen heated tensions between Jews and Arabs, particularly with the possible eviction of dozens of Palestinian families from Jerusalem's Sheikh Jarrah neighbourhood fuelling the situation.
One of the videos circulating on social media allegedly shows the stun grenade exploding inside Al Aqsa Mosque during Friday worshipping.
Thousands protested afterwards, waving the green flags of Hamas and chanting pro-Hamas slogans before dispersing peacefully.
At the beginning of Ramadan in mid-April, Israel blocked off a popular gathering spot where Palestinians traditionally socialize at the end of their daylong fast.
The attack follows the overnight detention of a woman with a knife in the West Bank city of Hebron, at the Cave of the Patriarchs, as well as overnight clashes in Jerusalem's east.
But anger has swelled in recent days over a long-running dispute in the Arab neighborhood of Sheikh Jarrah, where dozens of Palestinians in six households face eviction in favor of Jewish Israelis who claim several properties as rightfully theirs.
The State Department said it was "deeply concerned about the heightened tensions", and the evictions of Palestinian families.
The evictions are based in part on a 1970 Israeli law that allows Jews to reclaim East Jerusalem land owned by Jews before 1948.
The European Union also urged calm.
"I urge Israel to cease demolitions and evictions, in line with its obligations under worldwide humanitarian law", the envoy said in a statement.
Neighboring Jordan, which made peace with Israel in 1994 and is the custodian of Muslim holy sites in Jerusalem, has also condemned Israel's actions, as has the Gulf kingdom of Bahrain, which normalized relations with Israel a year ago in a USA -brokered deal.
According to media reports, the Jerusalem municipality is planning to build a biblical theme park-Gan Hamelech-in Al-Bustan neighborhood near the walls of the Old City after it demolishes 100 properties, which are home to nearly 1,550 Palestinians, 63% of whom are children.
Some 70,000 worshippers attended the final Friday prayers of Ramadan at Al Aqsa, the Islamic endowment that oversees the site said.
In a statement, the Ministry vigorously deplored "the Israeli attack against the Palestinians in occupied Jerusalem, where settlers are working to displace the residents of the Sheikh Jarrah neighborhood, a behavior that does not differ from the practices of ethnic cleansing".
The group called for protests in Gaza Saturday and police said they expected gatherings in Israel and the West Bank as well.
The letter notes that "East Jerusalem is part of the West Bank, and under worldwide law, Israel is in military occupation of this territory, notwithstanding its illegal incorporation of East Jerusalem within the Jerusalem municipality and its subsequent illegal de jure annexation of East Jerusalem".
Israeli police deployed in large numbers as Muslim worshippers were holding evening prayers at the site late Friday.
Police said protesters torched a vehicle and threw stones outside a house occupied by Jewish settlers. What's happening in Jerusalem is an intifada that must not stop.
Neither you, nor your army and police, can win this battle, he said.