Jerusalem holy site closure 'declaration of war' - Abbas
Yehuda Glick, a campaigner for greater Jewish prayer rights at the Temple Mount/al-Haram al-Sharif, was wounded.
Israeli police later killed a Palestinian suspected of shooting him.
The man, named as 32-year-old Moataz Hejazi, was shot after opening fire when police surrounded his home.
Rabbi Glick is a well-known US-born campaigner for the right of Jews to pray at the site, which they are currently prohibited from doing. The compound is known to Jews as the Temple Mount, and to Muslims as Haram al-Sharif.
It is the holiest site in Judaism, and also contains the al-Aqsa Mosque - the third holiest site in Islam.
In other developments
- Sweden became the first major Western European country to officially recognise Palestine as a state. Foreign Minister Margot Wallstrom said she hoped more countries would follow Sweden's lead - Israel's Foreign Minister Avigdor Lieberman was quoted as saying it was a "deplorable" decision
- The UN Human Rights Committee has called on Israel to halt settlement-building in the West Bank and investigate alleged violations committed by its forces in military operations in Gaza in 2008-09, 2012 and 2014
Palestinians hold the Israeli government responsible for a "dangerous act", Mr Abbas was quoted as saying by Nabil Abu Rudeina, in remarks carried by AFP news agency.
"This dangerous Israeli escalation is a declaration of war on the Palestinian people and its sacred places and on the Arab and Islamic nation," Mr Rudeina added.
"The state of Palestine will take all legal measures to hold Israel accountable and to stop these ongoing attacks."
Jerusalem's holiest site
- Known as the Temple Mount to Jews and al-Haram al-Sharif to Muslims, it comprises the al-Aqsa Mosque and the Dome of the Rock, and is next to the Western Wall
- The Western Wall, from the time of the Jewish Biblical temples, is the holiest site where Jews can pray; the Dome of the Rock, where according to Jewish tradition the Ark of the Covenant rested in the first temple, is the holiest site in Judaism
- The al-Aqsa Mosque is the third holiest site in Islam; the Dome of the Rock is revered by Muslims because of its connections to the Prophet Mohammed
- Christians also venerate the site because of its Biblical links to Jesus
- A Muslim committee has managed the compound since the time of the Crusades, while Israel, which has occupied East Jerusalem since 1967, controls access
- Israel maintains a ban on prayer by non-Muslims at the compound as a security measure
- Rabbi Yehuda Glick campaigns for allowing Jews to pray at the site
"We're facing a wave of incitement by radical Islamic elements as well as by the Palestinian Authority chairman... who said that Jews must absolutely be prevented from going on to the Temple Mount," he said, quoted by Haaretz newspaper.
Mr Netanyahu added that reinforcements for the security forces would be brought into Jerusalem to keep order.
The shooting of Rabbi Glick is the latest in a series of incidents which have led to an escalation of tensions in Jerusalem.
Some districts of East Jerusalem have seen nightly clashes between Palestinians and Israeli security forces since the conflict in Gaza.
Last week a Jewish baby and Ecuadorian woman were killed when a Palestinian attacker drove his car into a group of pedestrians at a tram stop in Jerusalem.
Police said Rabbi Glick's suspected attacker, Moataz Hejazi, had served time in jail in Israel and was released in 2012, adding that he belonged to the Islamic Jihad militant group.
The police anti-terrorist unit along with the Israeli internal security service Shin Bet had received information that Mr Glick's attacker was located in the Abu Tor neighbourhood, Israeli officials said.
Police say they were fired at after surrounding the house and shot back, hitting the suspect.
Rabbi Glick has had surgery for gunshot wounds to his chest and abdomen.
He had just attended a conference where delegates discussed Jewish claims to the compound, one of the most contentious areas of the Arab-Israeli conflict.
Israel argues that it protects freedom of worship at the site but Palestinians claim it is unilaterally taking steps to allow larger numbers of Jewish visitors.
The site is administered by an Islamic body called the Waqf, while Israeli police are in charge of security.