Israeli police guarded the Jewish settlers during the raid.
The police began to be deployed around the Qibla Masjid and did not allow the Palestinians inside to go outside.
They later started to take the Jewish settlers into the Al-Aqsa Mosque under intense security measures.
Earlier, the Israeli police did not allow young Palestinians to enter the Al-Aqsa Mosque complex for morning prayers.
The Palestinians, who were not allowed in, performed morning prayers around the mosque.
Tension escalated across Palestinian territories after Israeli forces stormed the Al-Aqsa Mosque complex in East Jerusalem and forcibly removed worshippers on Tuesday and Wednesday.
The Israeli raids on the mosque triggered rocket fire from the Gaza Strip and Lebanon, with Israel retaliating with airstrikes.
Palestinians accuse Israel of systematically working to Judaize East Jerusalem, where Al-Aqsa is located, and obliterate its Arab and Islamic identity.
For Muslims, Al-Aqsa represents the world's third-holiest site. Jews, for their part, call the area the Temple Mount, saying it was the site of two ancient Jewish temples.
Israel occupied East Jerusalem during the 1967 Arab-Israeli War. It annexed the entire city in 1980 in a move never recognized by the international community.