Israel's security cabinet said "security inspection based on advanced technologies and other means" will be put in place at the entrance to the Al Aqsa Mosque compound.
Israel decided on Tuesday to remove metal detectors it had placed at the entrance to the Al Aqsa Mosque compound in Jerusalem's Old City and replace them with less obtrusive surveillance means, a Cabinet statement said.
Prime Minister Benjamin Netanyahu's cabinet voted to remove the metal detector gates after a meeting that lasted several hours. And as word spread of the decision, a few hundred Palestinians gathered to celebrate near an entrance to the mosque compound, referred to as Haram al Sharif by Muslims and Temple Mount by Jews.
The security cabinet accepted "the recommendation of all the security bodies to change the inspection with metal detectors to a security inspection based on advanced technologies and other means," a statement from Netanyahu's office said.
Gregg Carlstrom explains why Israel reversed its decision to keep the metal detectors in place.
Witnesses in the Old City saw municipal workers installing metal beams above some of the narrow stone paved streets for closed circuit TV cameras. Israeli media said there were plans to invest in advanced camera systems.
The cabinet statement added that it had allocated about $28 million for the equipment and for additional police officers.
Tensions escalated sharply since Israel installed the metal detectors at entry points to Al Aqsa Mosque compound after two police guards were shot dead by gunmen there on July 14.
Earlier, United Nations Middle East envoy Nickolay Mladenov warned that a solution was needed by Friday to the Jerusalem crisis, which he said threatened to have "potential catastrophic costs well beyond the walls of the Old City."
Incensed at what they saw as a violation of delicate decades-old access arrangements at Islam's third-holiest site, many Palestinians had refused to go through the metal detectors, holding street prayers and often violent protests.
There was further pressure on Netanyahu following a fatal shooting incident at the Israeli embassy in Jordan on Sunday when an Israeli security guard shot dead two Jordanians in an incident that is still being investigated.
Jordan is the custodian of Jerusalem's Muslim holy sites, which Jews revere as the vestige of their two ancient temples and which was among East Jerusalem areas Israel captured in a 1967 war and annexed as its capital in a move not recognised internationally.
"It is extremely important that a solution to the current crisis be found by Friday," Mladenov told reporters after briefing the UN Security Council behind closed doors. "The dangers on the ground will escalate if we go through another cycle of Friday prayer without a resolution."
He also warned that the crisis was not a localised event.
"[It has] the potential to have catastrophic costs well beyond the walls of the Old City, well beyond Israel and Palestine, well beyond the Middle East itself," Mladenov said.
The 15-member Security Council met on the crisis at the request of Sweden, France and Egypt.