According to the Israeli public broadcaster KAN, extremist heritage minister Amichai Eliyahu's office will allocate 2 million NIS ($545,000) for the project, expected to be implemented in the coming weeks, Anadolu Agency reported on Tuesday.
The ministry is making coordination with the so-called security ministry, led by hawkish Itamar Ben-Gvir, to obtain police permission for the funded tours.
Earlier on Monday, Ben-Gvir told Israeli Army Radio that Jews have the right to pray at Al-Aqsa Mosque and expressed intentions to build a synagogue at the site.
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This marks the first time he has openly discussed building a synagogue there, although he has frequently called for allowing Jewish prayers at the site.
Al-Aqsa Mosque is considered the third holiest site in Islam.
Under the decades-old status quo maintained by Israeli authorities, Jews and other non-Muslims are allowed to visit the compound in occupied East al-Quds during specified hours, but they are not permitted to pray there or display religious symbols.
Ben-Gvir has also been criticised by some Orthodox Jews, who consider the site too holy a place for Jews to enter. According to leading rabbis, it is forbidden for any Jew to enter any part of Al-Aqsa due to its sanctity.
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In recent years, the restrictions at the compound have been increasingly flouted by hardline religious nationalists like Ben-Gvir, sometimes prompting confrontations with Palestinians.
The Al-Aqsa Mosque compound is administered by Jordan, but access to the site itself is controlled by Israeli security forces.
Source: Agencies