About 5,000 left-wing activists and Palestinians gathered Saturday to protest the eviction of four Palestinian families in the Sheikh Jarrah neighborhood of East Jerusalem.
Protesters carried Palestinian flags and chanted "Stop the destruction of homes" and "There is no sanctity in an occupied city."
Despite the heavy police presence, the demonstration has remained peaceful.
For the past six months, a group of independent left-wing activists have demonstrated every Friday in the East Jerusalem neighborhood, protesting the takeover of Palestinian homes by groups of Israeli settlers.
Last week, the demonstrators asked Jerusalem police for permission to hold a large rally in the street leading to a contested house, to protest against the settlers and show solidarity with the Palestinian residents of the neighborhood.
The police refused to authorize the rally and instead approved a much smaller gathering at a soccer field situated 300 meters from the home. The demonstrators said that the field is surrounded by a wall, it cannot be seen from the outside and is entirely cut off from the area near the contested home, which is the main focus of the protest.
Supreme Court justices were highly critical of the Jerusalem police decision this week after they refused the request by demonstrators.
"The police are taking the right to demonstrate 30 years backward," Supreme Court President Dorit Beinisch said during deliberations.
The justices ruled that 300 demonstrators would be allowed to approach the contested house at the conclusion of the rally.
Jerusalem District police commander, Aharon Franko, was asked to appear before the justices and said that the the contested house is in "one of the most explosive locations." He explained that "not a day goes by when there are not confrontations, fighting and stone throwing."
Police said that closing off the street, as the demonstrators would like, would make it difficult for worshippers to make their way to the nearby tomb of Simon the Just (Shimon HaTzadik).
At the start of Saturday's rally, Palestinian director and playwright Samih Jabarin criticized demonstrators who arrived at the rally carrying Israeli flags with the word "peace" on them, saying the only solution to the Israeli-Palestinian conflict is one bi-national state.
However, one of the rally's organizers said, "It is important to clarify that we have people of all stripes here, supporters of a bi-national state and supporters of two states for two peoples. But we are all united against the 'Judaization' of East Jerusalem.
The Palestinians, who want to make East Jerusalem the capital of a future state, say the property belongs to them.
Some 200 right wing activists held a counter demonstration nearby, although police managed to keep the peace between the two groups of protesters, Israel Police spokesman Micky Rosenfeld said.
Earlier Saturday, three men were injured in clashes between Palestinians and Israeli soldiers in the northern West Bank village of Burin.
The clashes erupted when soldiers stopped a group of Palestinians trying to approach a Jewish settlement, an Israeli military spokeswoman said.
Palestinians residents said the settlers were trying to bathe in a water cistern in their village.
Palestinians hurled rocks at the soldiers who responded with tear gas and rubber-coated steel pellets.
Tensions have been high in the West Bank since Israel declared last month it would add two contested shrines there to its national heritage list.
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