A gunman opened fire near an apartment block housing Jewish settlers in East Jerusalem on Monday, slightly wounding a security guard, police said.

Tension has been high in Jerusalem since violence broke out on Sunday at the city's most sensitive holy site and Israel's announcement that it plans to refurbish two West Bank religious shrines, sacred to Jews and Muslims, as part of a Jewish heritage project.

Police spokesman Micky Rosenfeld said shots were fired at a security guard near Beit Yonatan, a building housing eight Jewish settler families in the predominantly Palestinian neighbourhood of Silwan.

"He was lightly hurt ... and taken for treatment to hospital," Rosenfeld said, adding that police believed "a nationalistic motive" for the attack was likely. No one was arrested.

Last July, an Israeli court issued an order to evacuate Beit Yonatan, ruling the seven-storey block had been built illegally. Jerusalem Mayor Nir Barkat, who initially resisted implementing the order, said last month he would enforce it under protest.

East Jerusalem, captured by Israel in the 1967 Middle East war, was not included in a limited freeze on settlement construction announced by Prime Minister Benjamin Netanyahu in November. On Sunday, Israeli police entered the Jerusalem compound housing the al-Aqsa Mosque after Palestinians threw stones at visitors to the holy site. Police fired tear gas and rubber bullets to break up protests in the city.

Rosenfeld said there were no reports of unrest on Monday but admission to the compound, revered by Muslims as al-Haram al-Sharif and by Jews as the Temple Mount, would be permitted only to male Muslim worshippers aged over 50. There were no restrictions on women. Clashes have occurred for several days in the West Bank town of Hebron, site of the Tomb of the Patriarchs, which Israel has included in its Jewish heritage plan. A site near the West Bank town of Bethlehem is also included in the plan.