In anticipation of the protests on Friday, Israeli police barred access of Muslim men under 50 to the Al-Aqsa mosque compound and deployed some 3,000 policemen near the site. This could, however, not be independently verified.
Earlier, Palestinian worshippers clashed with Israeli security forces outside a gate to the Old City in Jerusalem. Israeli officials said they were a permanent measure but many worshippers refused to go through them and preferred to pray outside the compound.
Since Israel captured and annexed the Old City, including the compound, in the 1967 Middle East war, it has also become a symbol of Palestinian nationalism.
Tensions further increased after Israel placed a temporary ban on Muslim men under the age of 50 from entering the holy site on 21 July.
Crowds began chanting "Allahu Akbar" (God is Greatest) in protest. Police said they had been attacked by protesters armed with stones and Molotov cocktails.
Israeli police said five officers were wounded.
A wave of unrest that broke out in October 2015 has claimed the lives of at least 287 Palestinians or Arab Israelis, 44 Israelis, two Americans, two Jordanians, an Eritrean, a Sudanese and a Briton, according to an AFP toll.
Public Security Minister Gilad Erdan told army radio that Netanyahu would decide on the policy for the site but he "hoped" the metal detectors would remain in place over the weekend.
But after consultations with security chiefs and members of his security cabinet, Netanyahu decided not to do so.
The mosque lies on a hill known as the Haram esh-Sharif to the Palestinians and the Temple Mount in Israel.
Police said they had boosted their forces in and around the Old City, with units "mobilised in all areas and neighbourhoods".
Muslim religious authorities, who say the metal detectors violate a delicate agreement on worship and security arrangements at the site, have been urging Palestinians not to pass through, and prayers have been held near an entrance to the complex.
Tensions have risen since then.
Muslim leaders have called for mass protests at Friday noon prayers.
TRT World's Zeina Awad has more.
Questions about control of the site have frequently led to violent flare-ups between Israelis and Palestinians in the past.
"Where are you, nation of a billion, while prayer is being prevented at Al-Aqsa?"
Rivlin called last week's attack "intolerable".
Israel briefly closed the compound, holy to Jews as the site of biblical temples, and install the metal detectors which it said were commonplace at religious sites worldwide.