ISRAELI police have shot and killed a Palestinian man suspected of trying to kill a hardline Jewish activist in Jerusalem, an incident that threatened to further inflame the city's already high tensions.

Jerusalem has seen near-daily clashes between Palestinian protesters and Israeli police, particularly around a contested site in the Old City that is holy to both Jews and Muslims.

A gunman on a motorcycle shot and wounded Yehuda Glick outside a conference promoting Jewish access to the site, a hilltop compound known to Jews as Temple Mount and to Muslims as Noble Sanctuary.

Mr Glick, an American-born activist and a well-known advocate for greater Jewish access to the site, remains in hospital and in serious condition.

Police spokesman Micky Rosenfeld said police forces surrounded the suspect's home in East Jerusalem early yesterday. The suspect then opened fire and troops responded and killed the man, identified as Moatez Higazi, an Islamic militant recently released from prison.

The Jerusalem holy site has been a flashpoint for violence in recent months and has been fraught lately with clashes between Palestinian protesters and Israeli police.

In an effort to calm tensions, police said it has taken the unusual step of temporarily closing access to the site.