Jerusalem appeared to have returned to a semblance of calm last night as police reopened the Temple Mount and road closures from the West Bank were lifted, despite yesterday’s violent clashes.

The riots were in protest against the Israeli government’s approval given to 1,600 new homes in East Jerusalem, a move which cause a deep rift between Israel and the US, with US special envoy to the Middle East, George Mitchell, cancelling a visit to Israel.

Israeli media reported that Israel's ambassador to the US, Michael Oren, claimed ties between the US and Israel were at their lowest point since 1975. He has since denied making such a claim.

He said: "I was flagrantly misquoted about remarks I made in a confidential briefing this past Saturday. Recent events do not, I repeat, do not represent the lowest point in the relations between Israel and the United States."

US Secretary of State Hillary Clinton called the announcement of the planned housing in Ramat Shlomo “insulting”.

But she later qualified her statement and said that she did not believe relations were damaged between the two states.

“I don’t buy that,” she said.

“We have an absolute commitment to Israel’s security. We have a close, unshakeable bond between the United States and Israel and between the American and Israeli people, who share common values and a commitment to a democratic future for the world.”

“But that doesn’t mean that we are going to agree. We don’t agree with any of our international partners on everything.”

Mrs Clinton is believed to have requested in a private telephone conversation with Prime Minister Binyamin Netanyahu that he should cancel the proposed building as a concession.

Mr Netanyahu said only that he welcomed Mrs Clinton’s “warm words” about Israel, showing he is keen to put an end to the public spat.

But he made no promises about further concessions.

Extra police are still patrolling the Old City and east Jerusalem after Hamas called for a “Day of Rage” in which Palestinians threw stones, glass, burning tyres and homemade explosives at police.

The police responded with rubber bullets and tear gas.

More than 100 people were reported injured, including 14 police officers, and more than 70 arrested during the clashes.

Police chief David Cohen said he did not believe the riots were the sign of a new intifada. He said: "We are seeing signs of disorderly conduct but that is only a headline. We must be careful about characterisations and remarks being made."