"Israeli border police officers arrested three suspects over assaults on police officers who arrived at the scene to demolish a building in the Silwan neighbourhood of East Jerusalem", the statement said.
It added that the protesters threw stones and attacked the police, injuring two officers. Three cars parked in the area were also damaged.
According to various media reports, a number of Palestinians have also been injured as the demolition of Arab-owned property is taking place in Silwan's Al Bustan district.
Deadly clashes in East Jerusalem early last month led to the worst violence between Israel and Palestinians in the Gaza Strip in recent years. Palestinian militants launched several thousand rockets toward Israel. In response, Israel fired retaliatory strikes against Gaza.
In Israel, 12 people were killed and over 50 were seriously wounded during the hostilities. The death toll among Palestinians in the Gaza Strip, Jerusalem and the West Bank topped 270.