Al-Aqsa, located in occupied East Jerusalem's Old City, is the third-holiest site in Islam and the most-sacred Muslim place in Palestine.
Jerusalem's Islamic Awqaf Department, a Muslim body that administers Al-Aqsa, said 294 extremists participated in the storming of the site, where they performed Jewish rituals in violation of the status-quo arrangement governing the compound.
Under the longstanding agreement, prayer is reserved for Muslims at the site, while members of other faiths may only visit.
Thursday's incursion came amid calls by extremist groups for a major storming of the Al-Aqsa compound on the first day of Ramadan – the holiest month in the Muslim calendar.
Hamas has already warned Israel against ramping up tensions in Jerusalem, as happened last year which led to a brief war between the two.
Palestinians fear Israeli authorities may seek to divide the site between Muslims and Jews in terms of space and time available for use.
Al-Aqsa is frequently raided by Jewish fundamentalists protected by Israeli forces.
Other Muslim, and Christian, holy sites in East Jerusalem and the West Bank are often also targeted.
The holy city's Church of the Tomb of the Virgin Mary was recently attacked, prompting the Greek Orthodox Church to urge "international protection" of holy sites.
It comes amid a sharp uptick in violence against Palestinians.
Israeli forces and settlers have killed 90 Palestinians so far in 2023 according to the Palestinian health ministry – an average of more than one a day.