At least three Palestinians have been killed in clashes with Israeli security forces near the Al Aqsa Mosque in Jerusalem's Old City.
There have been daily confrontations since metal detectors were placed outside the compound last week.
Muslim men under the age of 50 have also been barred from entering the holy site.
The Palestinian Health Ministry said Mohammed Sharaf, 17, and Mohammad Hassan Abu Ghannam, age unknown, died of gunshot wounds in two neighborhoods of East Jerusalem further away from the center of tension in the walled Old City.
It reported a third Palestinian fatality, Mohammed Lafi, 18, later.
It was not immediately clear who fired the shots, with unconfirmed media reports that an Israeli from a settlement in the nearby occupied West Bank was responsible in Sharaf's death.
Israel's Channel 10 reported that a child of eight had died from tear gas inhalation, but that could not be confirmed.
Israeli police spokesman Micky Rosenfeld said four officers were injured in the unrest and the Palestinian Red Crescent ambulance service said at least 377 protesters had been hurt, some suffering from tear gas inhalation.
The Palestinian President Mahmoud Abbas has ordered the suspension of all official contact with Israel until it stops the restrictions.
"I declare the suspension of all contacts with the Israeli side on all levels until it cancels its measures at Al-Aqsa mosque and preserves the status quo," Abbas said in a brief televised speech after meeting his aides.
The restrictions were imposed after 2 Israeli police officers and 3 Palestinians were killed in an attack at the site seven days ago.
The Palestinian group Hamas and Muslim leaders worldwide called for mass protests on Friday over the measures.
Despite international pressure to remove the detectors, the Israeli Prime Minister Benjamin Netanyahu's security cabinet has decided to keep them in place, saying they were needed to prevent arms being smuggled into the shrine.
In protest, thousands of worshippers gathered for Friday prayers at various entrances to the compound.
They refused to enter, preferring to pray outside, in some cases filling the narrow alleyways of the Old City's Muslim quarter.
"We reject Israeli restrictions at the Aqsa Mosque," said Jerusalem's senior Muslim cleric, Grand Mufti Mohammad Hussein.
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The hilltop compound has long been a source of religious friction. 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. "This is our place of prayer, we have sovereignty here," Salaam said.
Nickolay Mladenov, the U.N. special coordinator for the Middle East, appealed for calm and the White House called for a resolution. Jordan, the custodian of the holy site, has also been involved in mediation efforts.
Far-right members of Netanyahu's government - which relies on religious, rightist and pro-settler parties for support - had publicly urged him to keep the restrictions in place.
"Israel is committed to maintaining the status quo at the Temple Mount and the freedom of access to the holy places," the security cabinet said in a statement.
"The cabinet has authorized the police to take any decision in order to ensure free access to the holy places while maintaining security and public order."
In 2000, a visit to the site by then-Israeli opposition leader Ariel Sharon triggered clashes that spiraled into the second Palestinian intifada (uprising) in which about 3,000 Palestinians and 1,000 Israelis died in four years of violence.