Thousands of Israeli nationalists marched in a flag-waving procession through East Jerusalem on Tuesday, an event that raised tensions with Palestinians and posed an early challenge to Israel's new government.

Dancing and singing "the people of Israel live," the crowd of mostly religious Jews, many carrying blue and white Israeli flags, filled the plaza in front of the Old City's Damascus gate.

Assailing the march as a "provocation," Palestinians called for protests to the march, with memories still fresh of confrontations between Israeli police and Palestinians during the Muslim holy month of Ramadan.

Last month, Israeli-Palestinian confrontations in contested Jerusalem helped trigger 11 days of cross-border fighting between Israel and Gaza's ruling Hamas.

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