JERUSALEM (Reuters) -Tens of thousands of Israeli nationalists are expected to march through the Muslim quarter of Jerusalem's Old City on Thursday, in an annual event that has raised fears of violence with Palestinian factions.

The annual parade, which marks Israel's capture of Jerusalem in the 1967 war, has increasingly become a show of force for Jewish nationalists, and for Palestinians a blatant provocation meant to undermine their ties to the city.

Around 2,500 officers will safeguard the march and try to keep it peaceful, police said, having prepared for all scenarios, including violence and anti-Arab chants by some marchers toward Palestinians and rocket fire from Gaza.

Islamist group Hamas, which governs Gaza, fired rockets into Israel during 2021's march, triggering an 11-day war that killed at least 250 Palestinians in Gaza and 13 people in Israel.

With another round of fighting between Israel and Gaza militants ending only last weekend, appetite for escalation appeared low.

Egypt, which mediated Saturday's truce, has been talking to Israeli and Palestinian factions to reduce tensions ahead of the march.

Israeli Prime Minister Benjamin Netanyahu, heading a nationalist-religious government, said the event would go ahead as planned.

Police officers set up positions near Damascus gate, a popular gathering spot for Palestinians, where the parade will enter the old city. Organisers hung Israeli flags along the narrow, cobble stoned alleyways.

For some, the march is also a religious matter. Jerusalem's Old City is home to the Al-Aqsa Mosque compound, Islam's third-holiest site. It is the most sacred site in Judaism, which knows it as the Temple Mount.

An Israeli police raid in the flashpoint site in April triggered rocket fire from groups in Gaza, Lebanon and Syria.

Palestinians, who view Thursday's march as part of a broader campaign to bolster Jewish presence across the city at their expense, have been angered by rising numbers of Jewish visitors at Al-Aqsa, some of whom defy a ban on non-Muslim prayer there.

Casting itself in recent years as a defender of Jerusalem's Palestinians and Muslim holy sites, Hamas urged Palestinians to bolster their presence at the compound ahead of Thursday and confront any Israeli encroachment.

A parallel march was set to take place in Gaza at the border with Israel.

Israel's far-right police minister Itamar Ben-Gvir said in a video message on Wednesday that officers would stop any attempt to wreck celebrations and promised "A flag march... an ascension of Jews to Temple Mount without anyone threatened or harmed."

A few Israeli members of parliament joined groups of Jewish visitors who toured the compound hours before the march was set to begin. Those visits passed without incident.

Jerusalem is at the heart of decades of Israeli-Palestinian conflict. Israel sees all of the city as its eternal capital. The Palestinians want the eastern section, annexed by Israel in a move not recognised abroad, as capital of their future state.

(Reporting by Maayan Lubell and Nidal al-Mughrabi; Editing by Bernadette Baum and Sharon Singleton)