Hamas is urging Palestinians to abandon peace efforts and launch a new uprising against Israel in response to US President Donald Trump's recognition of Jerusalem as its capital.
Palestinian factions called for a "Day of Rage" on Friday, and on Thursday a wave of protest in the West Bank and Gaza brought clashes between Palestinians and Israeli troops. At least 31 people were wounded by Israeli gunfire and rubber bullets, medics said.
The Israeli military said on Thursday evening two rockets had been fired towards Israel from the Hamas-ruled Gaza Strip, but did not cross into Israeli territory.
Some protesters threw rocks at soldiers and others chanted: "Death to America! Death to the fool Trump!"
"We should call for and we should work on launching an intifada (Palestinian uprising) in the face of the Zionist enemy," Hamas leader Ismail Haniyeh said in a speech in Gaza.
Naser Al-Qidwa, an aide to Western-backed Palestinian President Mahmoud Abbas and senior official in his Fatah party, urged Palestinians to stage protests but said they should be peaceful.
Israel considers Jerusalem its eternal and indivisible capital. Palestinians want the capital of an independent state of their own to be in the city's eastern sector, which Israel captured in the 1967 Middle East war and annexed in a move never recognised internationally.
Israeli Prime Minister Benjamin Netanyahu hailed Trump's announcement as a "historic landmark".
Other close Western allies of Washington, including France and Britain, have been critical of Trump's move. Pope Francis has called for Jerusalem's status quo to be respected, while China and Russia have expressed concern.
Trump's decision has raised doubts about his administration's ability to follow through on a peace effort that his son-in-law and senior adviser, Jared Kushner, has led for months aimed at reviving long-stalled negotiations.
Haniyeh called on Abbas to withdraw from peacemaking with Israel and on Arabs to boycott the Trump administration. Abbas said on Wednesday the United States had abdicated its role as a mediator in peace efforts.
Israel and the United States consider Hamas, which has fought three wars with Israel since 2007, a terrorist organisation. Hamas does not recognise Israel's right to exist and its suicide bombings helped spearhead the last intifada, from 2000 to 2005.
Palestinians switched off Christmas lights on trees outside Bethlehem's Church of the Nativity.