There were no injuries reported from the firebombing.
Police quickly deployed across the hilltop compound, scuffling with worshipers in the area as they searched for the assailants.
Three suspects were arrested and police were seen wrestling a woman to the ground.
Tensions at the Al-Aqsa compound have been rising for days over Israeli military infractions on the sensitive holy site.
"Roughly 59 extremists, 80 Jewish students and 3 Israeli intelligence agents stormed the Al-Aqsa compound today", Firas al-Dibs, a spokesman for Jerusalem's Religious Endowments Authority, a Jordan-run agency tasked with overseeing the city's Muslim and Christian sites, said in a statement.
Amid rising tensions on the holy site, police say arrests were carried out and the Mount was closed to allow for searches. "All doors are closed and no one is allowed in", he said. It said no soldiers were injured. Nickolay Mladenov, UN's envoy for Middle East peace, wrote on Twitter.
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His office said he was in communication with relevant parties, including Jordan, "to pressure the occupation's government to halt this unsafe escalation", and called on the global community to urgently intervene.
Meanwhile Turkish Foreign Minister Mevlut Cavusoglu called on "the whole world to react to Israel's brazen attacks on our scared land". "We will do everything necessary to restore security and quiet to the area adjacent to the Gaza Strip and to the south in general".
Worshippers on the mount have staged protests and clashed with police over the site.
The area inside the Gate of Mercy was sealed off by Israeli authorities in 2003, and it has been kept closed to stop illegal construction work there by the Islamic Waqf, the organization that administer the Temple Mount.
The Waqf contends that because the heritage group is now defunct, the council should regain full access to the building like any other in the holy esplanade.
Demonstrations have devolved into stand-offs with police in recent weeks.
The Palestinian Authority (PA) reaffirmed on Tuesday that East Jerusalem is part of the Palestinian territories occupied by Israel in 1967 and the eternal capital of the state of Palestine.
Facebook, Instagram down Wednesday: Facebook blames server configuration for longest-ever outage
Facebook suggested there was nothing new in the New York Times report . "We have true privacy and unlimited space for everyone". Instagram users began reporting problems with the photo-sharing app shortly after Facebook seemed to go haywire.