Jerusalem (AFP) - In the Old City of Jerusalem, both Palestinians and Jews were talking on Sunday about fear and the prospect of a new intifada or uprising.

Some sought to exorcise the spectre of a new conflagration which other Palestinians would welcome, while Jews said they have seen it all before.

Between the two peoples there seems to be a total lack of understanding of the other, although they may live just streets apart within the same ancient walls.

The Western Wall, visited by tens of thousands of Jews over the high holy days of the past few weeks, is at the foot of the plateau housing the Al-Aqsa compound to which Muslims flocked in similar numbers for the feast of Eid al-Adha during the same period.

But the Palestinians do not understand the small but strident minority of Jews who claim the right to worship at the Al-Aqsa site, known to them as Temple Mount and the most revered spot in Judaism.

And the Jews do not grasp that it is just a small minority of radicalised Muslims who are sowing terror with knife attacks in the Old City, such as Saturday's killing of a rabbi and an off-duty soldier and the wounding of the rabbi's wife and their two-year-old child.

The attacker, shot dead by police, was a young man from the Israeli-occupied West Bank said to be an Islamist militant and reportedly enraged by increasing Jewish encroachment on the mosque compound.

A few metres (yards) from the attack site three Palestinians sit at the foot of a wall.

- 'We live in fear' -

A few tourists pass nearby, walking the streets of the bazaar with its now shuttered shopfronts.

Israel has barred the Old City to all but a few Palestinians who live or work there, cutting off not only the mosques but keeping local Christians from shrines such as the Church of the Holy Sepulchre.

Police barricades are at every corner.

"Nobody has slept since last night," says one of the three sitting Palestinians, asking not to be identified.

"We live in fear -- we know that at any moment the settlers could come to attack us."

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He is referring to a rampage by Jewish extremists at a shopping mall outside the city walls after Saturday's stabbings, where a flag-waving mob seeking vengeance searched for Palestinians, shouting "Death to the Arabs".

"The intifada started because the Israelis have worn people down to the point where they are now exploding," he says.

Subhiyeh Abu al-Hijjeh, a veiled Muslim woman from northern Israel, says the latest events were part of an uprising "to defend Al-Aqsa".

Israeli Prime Minister Benjamin Netanyahu "does not want to understand, but Al-Aqsa is a red line", says Sheikh Kamal Khatib, deputy head of the Israeli Islamic Movement which organises Israeli Arabs to confront Jewish visitors to the site.

For many Muslims, Israel's two-day closure of the Old City to Palestinians living beyond its walls is a further sign of intent to take over the hallowed compound, coming in the wake of restrictions on young male worshippers and repeated police incursions.

- 'Our people's strength' -

"By closing the Old City the Israelis are showing they do not want peace," says Abu Hassan, allowed to reach his workplace because at 53 he is not subject to the age bar.

"How do you want us to talk peace after what happened yesterday?" asks Yaki Saada, 60, a Jewish Israeli.

He and his wife Nava, 57, left family celebrations of the Sukkot Jewish festival which ends on Monday evening to come from the southern port city of Ashdod to Jerusalem in a show of solidarity with the victims and to "pray for peace" at the Western Wall.

Another Israeli, giving his name as Jonathan E, 27, was walking the Old City after praying at the wall.

"We are not afraid," he says. "We're very familiar with wars and attacks."

"That is our people's strength," adds his wife Deborah, 22.

Yossi Krakover, 47, a settler in the Israeli-occupied West Bank, found it incomprehensible that Jews were killed "simply because they are Jews".

He had come to Jerusalem for a rally in support of the rightwing Netanyahu.

Jewish settlements, a key issue in the Israeli-Palestinian conflict, should not bother anyone, he believes.

"We came here to build our home, a peaceful home," he says.

"Many people do not want to understand that the people of the Bible is returning to the land of the Bible."