Israel on Wednesday lifted its tight restrictions on Palestinian access to Jerusalem's holiest shrine and called off an extended West Bank closure after days of clashes between Palestinians and Israeli security forces.

Egyptian security officials arrested an Israeli journalist as he tried to sneak across the porous Israeli-Egyptian border with African migrants, his newspaper reported on Monday.

Israel's prime minister tried to play down a serious diplomatic dispute with the United States on Sunday, urging calm after another stern rebuke from Washington over plans to build 1,600 new apartments for Jews in contested east Jerusalem.

Israel has sealed off the West Bank for 48 hours, preventing Palestinians from entering Israel because of fears of unrest.

The Palestinians are threatening to pull out of US-mediated peace talks with Israel before the negotiations even start.