Israeli police have prevented Palestinians in occupied East Jerusalem from holding events to mark the city's designation as "capital of Arab culture" for 2009.
About 20 Palestinians were detained in and around East Jerusalem on Saturday, but there were no reports of violence, Shmulik Ben-Ruby, a police spokesman, said.
Police reinforcements were deployed around the city and barricades were set up on routes to the al-Aqsa mosque, Islam's third holiest site.
Witnesses said that flags and banners associated with the event were confiscated.
At one school, police and soldiers burst balloons in the colours of the Palestinian flag that the children were trying to release to mark the event.
Hatem Abdel Qader, who handles Jerusalem affairs for the Palestinian Authority, was reportedly among those arrested.
Ben-Ruby said the crackdown had been ordered by Israel's internal security ministry because the celebrations violated understandings with the Palestinian Authority.
Celebrations in Nazareth, Israel's largest Arab city, were also cancelled by the police.
"This measure is yet another example of the many extreme policies that the various ministries in the Israeli government impose on us," one event organiser told Al Jazeera.
"These measures are imposed on all artists and people who care about culture. This is a form of prevention of our freedom of expression.
However, events were held in the West Bank.
Mahmoud Abbas, the Palestinian president, and Salam Fayyad, the prime minister, received officials from Morocco, Tunisia, the United Arab Emirates, Kuwait, and Jordan before attending the ceremony at an auditorium made to look like the Old City.
Israel captured East Jerusalem from Jordan during the 1967 Middle East war and annexed it as the Jewish state's "eternal and indivisible capital", a move which has not been recognised internationally.
Palestinians demand East Jerusalem as the capital of any future Palestinian state.
Jerusalem follows Damascus as the "capital of Arab culture", a title that has been handed to a different city by the Arab League every year since 1996.
Winners typically use the occasion to highlight Arab culture, sponsoring poetry, music, dance performances, lectures, school activities and sporting events.