After two weeks of mounting tension and sporadic clashes between Israeli security forces and Palestinian protesters, a showdown is expected when Friday prayers are called at the al-Aqsa mosque in Jerusalem's old city.

Thousands of Israeli soldiers and policemen are being deployed around the site after the Palestinian Authority called a one-day general strike and a leading Islamic cleric in Egypt urged the Arab world to rise up in "a day of anger".

But what will worry Israel the most are mutterings in the occupied West Bank of a "third intifada". The most recent intifada, or mass uprising, erupted in 2000 and lasted four years – resulting in the deaths of thousands of Palestinians and hundreds of Israelis.

As tensions have risen in recent days, the rhetoric has grown more incendiary.

Hatem Abdel Kader, a senior Palestinian official in the West Bank, told the Jerusalem Post: "Israel's decisions so far have been very dangerous, and if they don't want things to escalate, the Israelis should back away from this issue.

"If not, we are afraid that the situation could lead to an explosion. It could lead to a third intifada."

As in 2000, the flashpoint of the simmering violence has been the al-Aqsa mosque, regarded by many Israelis as the location of the Jewish Temple the Romans destroyed in AD 70.

An inflammatory visit to the site by Ariel Sharon, the former Israeli prime minister, nine years ago provided the spark for the second intifada.

This time the violence was triggered by accusations that "Jewish right wing extremists" had been escorted by Israeli police into the al-Aqsa mosque compound, known as the Temple Mount by Jews on two recent Jewish holidays.

Down the winding alleyways of the old city and into the Arab suburbs of east Jerusalem, word spread of a planned Jewish takeover of Islam's third holiest site. Older grievances about Israeli archaeologists allegedly damaging the foundations of the mosque during excavation work quickly rose to the fore.

Stone throwing Palestinian protesters clashed with police first in the old city, then in other parts of east Jerusalem. Anger was stoked even further as Israel restricted access to the mosque five days ago, conditions which apply on Friday.

On a flat top roof outside the old city's walls on Friday, dozens of Muslim men gathered to vent their frustration.

"Our dignity is wounded," said Zahy Nujeidat, spokesman for the Islamic Movement, an organisation representing Israel's Arab population. "The al-Aqsa mosque is our fate, our history, our culture. Without it we have nothing."

Yet, as in 2000, the issue of the mosque hides deeper rooted issues.

Some observers say the Palestinian Authority is taking advantage of the situation to deflect attention from its own unpopularity.

At the same time, public frustration at Israel's perceived obstruction of the peace process and the expansion of Jewish settlements in east Jerusalem and the West Bank is growing. There is deep suspicion of Benjamin Netanyahu, the Israeli prime minister, and his right-wing government.

"What we have here is a very volatile mix," said Ghaith al-Omari, president of the American Task Force in Palestine. "Once incident, one shot fired and we could see an explosive situation in Jerusalem."