Thousands of the faithful from the occupied West Bank headed to the mosque through Israeli checkpoints, while some found ways round them in order to pray in the city at the end of their day's fasting during the last 10 days of Ramadan.
A Palestinian man in his early 40s, accompanied by his son, told Aljazeera.net on Wednesday on the condition of anonymity: "I walked three hours to get here."
He said that they had travelled approximately 20km from the West Bank town of Ramallah by dodging Israeli checkpoints and security patrols.
Israeli officials said on Wednesday afternoon that West Bank men over the age of 45 and women over 40 would be allowed to pass Israeli checkpoints without a military permit.
Mickey Rosenfeld, a police national spokesperson, told Aljazeera.net: "Police took all the necessary precautions so that Lailat al-Qadr will take place calmly and safely."
Lailat al-Qadr (the Night of Power) commemorates the date that the prophet Mohammed is believed to have received the first verses of the Quran. Its exact timing is unknown, but it is considered to most likely fall on the 27th night of the Muslim month of Ramadan.
Clashes last Friday had raised fears that Palestinians and Israeli forces would once again face off.
Police officers in riot gear at the main crossing point from Ramallah into Jerusalem were turning away all men who appeared below the age limit.
But no soldiers were checking the identity cards of those allowed to pass.
Later, however, Israeli forces at this same checkpoint fired tear gas at crowds of Palestinians.
Thousands of worshippers prayed together under the golden dome of the Dome of the Rock mosque within the al-Aqsa compound, Jerusalem's main mosque and Islam's third holiest site.
After breaking the usual Ramadan fast, many spent the late hours in prayer.
Sheikh Jamil Hamammi, a university lecturer and member of the Higher Islamic Council, told Aljazeera.net: "On this night, the angels descend, as do the spirits. People use this night to come closer to God."
The special day is also a boon for Jerusalem shops owners and vendors.
Jerusalem's narrow alleys were lined with men selling foil- wrapped candies, bowls of pink pudding, and trays of Arabic sweets.
Outside the doors of the 35-acre mosque compound, 40-year- old Eid Qous barbequed chicken.
He said that he works as a chef only once a year for Lailat al-Qadr, but that he expected to sell his entire stock of 200 chickens purchased for the occasion.