Occupied East Jerusalem - Dozens of people have been injured in the largest clashes in occupied East Jerusalem in years, as Palestinians fought with police after the mutilated body of a boy was found dumped in a forest outside the city.

The body may belong to Mohammed Abu Khdair, a 17-year-old from the Shuafat neighbourhood, who was abducted on Wednesday morning.

Police say they are investigating whether the murder was a revenge attack, carried out after three kidnapped Israeli settlers were found dead earlier this week in the occupied West Bank.

A police spokesman said Abu Khdair was reported missing early on Wednesday. Witnesses said that he was abducted around 3.45am and thrown into a car by two or three men as he was walking to the mosque.

"I heard screaming outside: 'Mohammed has been kidnapped'," said Abu Moussa Abu Khdair, a cousin who was in the mosque at the time.

"When I ran outside he was gone, and the youth [outside the mosque] said he was taken in a car."

By nightfall, though, the body was still unidentified. DNA samples have been taken as the body was too badly burned to be recognised.

Relatives said his father spent most of the day in a police station.

Stun grenades

The discovery led to more than 12 hours of clashes in Shuafat on Wednesday.

Local Palestinian youths blocked the light railway and threw stones at Israeli border police, who fired stun grenades and rubber-coated steel bullets.

Clashes dragged on throughout the day, despite the summer heat and the Ramadan holiday.

The heaviest fighting was outside the Abu Khdair family home, and the mosque where he was abducted.

The Palestinian Red Crescent said that more than 50 residents were injured throughout the day; there were no injuries among the police. Among the injured were at least four journalists, including two from Palestine TV, one of whom was seriously injured.

"From 7am the army tried to block off this neighbourhood," said Akram al-Salameh, the owner of a nearby bakery who was wounded.

"They forced me and my employees to leave ... . I think they are taking revenge for what happened," he said, referring to the kidnapping.

The kidnapping happened just hours after a funeral for the three settlers, who were abducted on June 12 while hitchhiking home from their religious seminary in the occupied West Bank.

Their bodies were found on Monday near Hebron, prompting fear of retaliatory attacks against Palestinian citizens of Israel, who make up 20 percent of the population.

Micky Rosenfeld, a spokesman for the Israeli police, said the department was investigating whether the abduction and possible murder were "criminal or nationalistic".

Additional officers have been sent to Jerusalem, where several Palestinian neighbourhoods were closed to traffic, and in northern Israel.

Facebook campaign

In a statement, Benjamin Netanyahu, the Israeli prime minister, called the incident "a heinous murder".

"I call on all sides not to take the law into their own hands. Israel is a nation of laws for all, and all are compelled to follow the law," he said,

Mahmoud Abbas, the president of the Palestinian Authority, demanded that Israel did more to stop future attacks.

"We call for providing international protection for the Palestinian people against settlers' attacks that, under the protection of Israeli occupation forces, have continued unabated," he said in a statement.

The mood in Jerusalem, in particular, has been extremely tense since Monday.

Dozens of people were arrested at a right-wing rally on Tuesday night, where protesters chanted "Death to the Arabs".

One man was jailed overnight for attacking a Palestinian worker in a fast-food restaurant in the city, and two other assaults were reported on Tuesday.

"Palestinian blood is no less valuable than the blood of settlers," Ahmed Tibi, a Palestinian member of the Knesset, said during a visit to Shuafat on Wednesday.

Israeli aircraft carried out several strikes in the Gaza Strip early on Thursday, an official and witnesses said, after Palestinians fired rockets into southern Israel.

At least 10 civilians were injured in the northern Gaza Strip, including a woman who was described as being in critical condition by the Gazan emergency chief Ashraf al-Qedra.

The Israeli government has blamed Hamas for the abduction of the three settlers, and it has carried out dozens of air raids this week in Gaza.

In a statement, Hamas said Israel would "pay the price" for Abu Khdair's abduction: "Our people will not let this crime pass, nor all the killings and destruction by your settlers."