Israel has deployed over 2,000 police for an annual flag-waving march by extremist ministers and their supporters commemorating Israel's capture of Jerusalem.

The "flag march," also known as the "flag dance", which begins in the western part of the city at 4:00 pm (1300 GMT) on Thursday, is seen by Palestinians and many Israelis as a provocation by nationalist groups and extremist settler movements.

On the day, Palestinians are forced to close their shops and are banned from the social hub of Damascus Gate to make way for the marchers.

Each year, thousands of Israeli nationalists participate in the march, waving blue and white Israeli flags and singing songs. But in some cases, protesters chant anti-Arab slogans as they pass by Palestinian onlookers and businesses.

Two years ago, the march spark an 11-day war between Israel and Palestinian fighters in Gaza.

Following the 1967 Six-Day War, Israel annexed east Jerusalem and its Old City in a move never recognised by the international community.

Netanyahu said, "we are also doing this against all of the threats around us," days into a ceasefire which ended deadly cross-border fighting with Palestinian Islamic Jihad movement's members in the Gaza Strip.

Thirty-three people, including multiple civilians, were killed in the blockaded Palestinian enclave and two in Israel, a citizen and a Gazan labourer.

Armed group Hamas which rules the coastal territory, said ahead of the march it "condemns the campaign of the Zionist occupation (Israel) against our Palestinian people in occupied Jerusalem".

In a test ahead of the parade, about 300 Jews were visiting Jerusalem’s most sensitive holy sites early on Thursday, according to Beyadenu, an activist group that promotes Jewish visits to the site. Police were seen escorting groups of Jewish visitors, and more lawmakers were expected to arrive later.

Last year, there were several isolated incidents of violence around the rally.

Clashes broke out between Israeli forces and Palestinians elsewhere in east Jerusalem, with the Palestinian Red Crescent saying 79 Palestinians were injured in and around the Old City.

Since last year's rally, Israel's leadership has taken a marked shift to the far-right.

Ben-Gvir, the country's national security minister, was convicted in 2007 of supporting a terrorist group and inciting racism.