Around 20 officers were injured. The Palestinian Red Crescent said over 100 Palestinians were injured and more than 20 hospitalised.
The confrontation follows days of mounting tension, with Palestinians accusing police of stopping them gathering for Ramadan outside the Damascus Gate.
The Jewish extremist group Lehava had called on supporters for a “show of honour”, the ToI said.
Palestinian Authority president Mahmoud Abbas said he held the Israeli government “fully responsible” for the breakdown in order.
Bezalel Smotrich, leader of the Religious Zionist Party, tweeted, “The riots of the Arab enemy throughout the country in recent days takes us back many years to the great Arab revolt of 1936,”