Israel has unexpectedly eased restrictions on Palestinians looking to visit Jerusalem during the Muslim holy month of Ramadan, saying improved security meant it could let in thousands more from the occupied West Bank.

Israeli officials said Wednesday they had lowered the age limit for men wanting to visit al-Aqsa mosque in the Old City to 40 from 50 and had also handed out seven times more permits to Palestinians between the ages of 35 and 40.

Religious authorities said up to half a million people visited the third holiest site in Islam on Tuesday night, many of them from the nearby West Bank, as visitors and pilgrims flowed through the checkpoints on Jerusalem's Eastern flanks.

"I'm rejoicing and so happy to be in Jerusalem after 10 years of not visiting," said 42-year-old Mohammed Rashid, from the West Bank town of Yatta, sipping a midnight draught of coffee in a brightly lit old city arcade.

The Coordinator for Government Activities in the Territories' said that whereas last Ramadan it had handed out just 16,700 entry permits, this year it had distributed 123,514, and had also slashed the age limit.

A COGAT spokesman said the change was "due to the security situation," adding that Israel wanted "to support and strengthen the economy and allow Palestinian's freedom of religious worship in the maximum".

However, the new rules only apply for the last few days of Ramadan, after which the old restrictions come back into force. "Why am I allowed in now, but next week I'm not?" Rashid asked.

The Old City's stone streets, normally echoing caverns hinting at isolation and hard economic times by night, were a thick flow of pilgrims on Tuesday night, coursing past stalls of traditional cross-stitched dresses, prayer beads, spices and sweets.

"It's not a question of the number of permits, but why permits are needed at all," said Hanan Ashrawi, a member of the Palestine Liberation Organization's executive committee. "To cut Palestinians off from their cultural, religious and political institutions in Jerusalem is unjust and unfair."