Newly installed railings, gates and scaffolding where cameras were previously mounted were removed from the entrance to the compound, known to Jews as the Temple Mount, reported Al Jazeera early on Thursday.
On Tuesday, Israel had removed metal detectors from the entrance, installed after an attack nearby that killed two policemen on July 14.
Palestinians began to gather at the entrance to celebrate in the early hours of Thursday, with whistling and constant horns from cars.
A Palestinan man in the crowds at the entrance told Al Jazeera that he was there to celebrate a signifcant "victory".
"Today is a joyful day, full of celebration and sorrow at the same time - sorrow for the people who lost their lives and were injured," he said.
"We are under occupation and the al-Aqsa Mosque is a red-line to everyone in Jerusalem - actually, to everyone in Palestine, and all over the Muslim world - but much more for the people of [Jerusalem]. It's dearer than their own lives,
