Israeli police have stopped a series of Palestinian gatherings that are part of celebrations to designate Jerusalem as the 2009 "Capital of Arab culture."
During a speech in the West Bank town of Bethlehem, Palestinian President Mahmoud Abbas urged Israel to reverse its long-standing policies on Jerusalem for the sake of peace. He called on Israel to halt Jewish settlements.
Israeli officials say the celebrations violate a law that prohibits the Palestinian Authority from organizing events on Israeli territory.
Israel annexed East Jerusalem after capturing it in the 1967 Six-Day War. The annexation has not been international recognized, and Palestinians want East Jerusalem to be the capital of a future state.
Meanwhile, exiled Hamas leader Khaled Meshaal told the Australian newspaper that the Palestinian militant group will try to capture more Israeli soldiers if Israel refuses to release Palestinian prisoners.
His remarks come as the family of Israeli soldier Gilad Shalit on Saturday marked 1,000 days since his capture, with a demonstration outside Israeli Prime Minister Ehud Olmert's residence.
Hamas militants seized Shalit during a cross-border raid nearly three years ago. The soldier has become a focal point of Egyptian efforts to mediate a long-term cease-fire between Israel and Hamas in Gaza.
Hamas is seeking the release of hundreds of prisoners held by Israel in exchange for Shalit.