Reporting from the mosque's al-Amood gate, Aljazeera TV correspondent al-Shereen abu Akila said Israeli security presence throughout Jerusalem and at the entrances of the old city that lead to the al-Aqsa mosque.
A large number of Palestinians, mainly Jerusalem residents or those in the Green Zone arrived at the mosque for the prayers, the correspondent reported.
Palestinians in the West Bank were unable to enter the city due to barricades put up by Israeli security, she said.
The Israeli occupation forces said it would only allow those Palestinians from the West Bank aged over 60. A few people under 60 who managed to cross the barricades were turned away at the gates of the old city.
However, there was no age limit imposed on residents of Jerusalem, the correspondent said.
Parts of the al-Aqsa compound
were declared out of bounds
Israeli Prime Minister Ariel Sharon had earlier said he would limit the number of worshippers at the holy site to 50,000 unless Muslim clergy agreed to take steps to prevent a possible collapse of the structure.
Later Sharon backed down when Muslim officials insisted the shrine was safe and said they would not meet the Israeli demands, which included roping off a corner of the sacred hilltop, known to Muslims as Haram al-Sharif.
A Sharon spokesman told Aljazeera TV that unlimited number of worshippers would be allowed into the mosque on the first day but with certain areas out of bounds.
Israeli experts had warned that a section of the mosque's compound weakened by an earthquake might collapse under the weight of crowds of worshippers, the TV reported.
In the past, as many as 250,000 Muslims have streamed to the mosque for Friday prayers during Ramadan.