The gunfight took place just outside the Haram al-Sharif (Temple Mount) and left three Palestinians and two Israeli police officers dead.
A number of Palestinian leaders expressed concerns that Tel Aviv would exploit the attacks to make changes to the status quo on the compound.
Sheikh Ikrima Sabri, the former grand Mufti of Jerusalem and Palestinian territories, said on Saturday that the closure was a "collective punishment" that affected thousands of worshippers, adds Al-Jazeera. The victims were members of the Druze faith, which incorporates elements of Islam, Hinduism and classical Greek philosophy.
The statement also described the Israeli actions as a blatant aggression practiced in the absence of any action by Arabs and Muslims to stop Israel's daily violations of the sanctity of al-Aqsa Mosque.
The Waqf, Jordan's Islamic authority that manages religious affairs at the site, was outraged over the metal detectors.
Israeli authorities said the closure was necessary to carry out security checks and announced it would reopen the compound on Sunday. But Prime Minister Benjamin Netanyahu reiterated that he will maintain the status quo and continue to prevent Jews from praying at Judaism's holiest site, in accordance with Muslim demands.
Muslim worshippers performed prayers in the streets near Jerusalem's walled Old City after police sealed the area in the wake of a Palestinian shooting attack that killed two Israeli policemen. Three assailants were shot and killed, police said.
Firas Dibs, spokesman for the Islamic Waqf which runs the site, confirmed reports that workers from the Israeli-run Jerusalem municipality had entered the site Sunday morning to clean it before it was reopened - a move they said was unprecedented.
"Metal detectors will be stationed at the entrance gates to Temple Mount and cameras covering activity on the mount will be installed outside it", Netanyahu's statement said.
Meanwhile, the Perdana Global Peace Foundation today criticised the latest act by the Israeli regime in closing the Al Aqsa Mosque for two days consecutively including the prohibition of the ázan' or Muslim call for prayers and the Friday prayer at the mosque last week.
Friday's shooting from inside the walled compound in Jerusalem's Old City killed two Israeli policemen.