A Hamas banner featuring a greeting for Eid al-Fitr, a holiday which marks the end of the holy month of Ramadan, was raised on Temple Mount in Jerusalem on Monday.
The incident happened at a time when more than 200,000 worshippers were visiting the holy site to celebrate Eid al-Fitr.
A video was shared on Twitter, showing a group of people raising the banner to the cheers of the crowd.
According to Israeli police, the banner was removed shortly after it was raised and an investigation was launched to identify those involved in the incident.
Tensions around the Al-Aqsa mosque have been on the rise in recent weeks after clashes between Israeli police and Palestinian worshippers who claim that Israeli security were preventing them from visiting the site during the holy month of Ramadan.
According to Yahya Sinwar, the leader of the Palestinian Islamist movement Hamas in the Gaza Strip, Israel should stop "attacking" al-Aqsa Mosque. "Our people and our nation must prepare for a big battle if the occupation does not stop attacking al-Aqsa Mosque," Sinwar said, quoted by the Jerusalem Post.