Israel's security cabinet on Thursday broadened the rules under which stone-throwers can be targeted by live fire, Prime Minister Benjamin Netanyahu's office said.
"The security cabinet has decided to authorise police to use live ammunition against people throwing stones and Molotov cocktails when the life of a third person is threatened and no longer only when the police officer is threatened," a statement said.
Netanyahu has publicly "declared war" on those who throw rocks and petrol bombs, especially after an Israeli motorist died earlier this month, apparently as a result of Palestinian stone-throwing.
The security cabinet met to decide on measures to strengthen enforcement against demonstrators throwing stones and incendiary devices after police said 13 Palestinians, including nine children, were arrested overnight.
"We have decided to penalise more severely adult stone-throwers with a minimum sentence of four years in prison and also to authorise larger fines for minors and their parents," the statement said.
"These sanctions apply to all Israeli citizens and residents of Israel," it said, referring to Palestinian residents of east Jerusalem who do not have Israeli citizenship.
On September 16, Netanyahu vowed "war" on stone-throwers with tougher penalties and new rules for security forces on when to open fire, following riots at a Jerusalem flashpoint.
He revealed the plan as he visited the site of a car accident that killed 64-year-old Alexander Levlovich, who died in what Israeli officials labelled a nationalistic stoning attack.
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"This stone is one too many," the premier's office quoted him as saying. "We are declaring war on those who throw stones and bottles, and rioters."
Netanyahu's statements, while mainly referring to street protests and rioting, followed three days of clashes between Palestinians and Israeli police at Jerusalem's Al-Aqsa mosque compound over the Jewish new year.
Jerusalem, whose eastern and Palestinian side is occupied and annexed by Israel, has seen months of violence between Israelis and Palestinians.
Under unwritten rules that govern the Al-Aqsa compound since 1967, Muslims can go to the site when they want, and Jews only for a few hours but not to pray.
Jews refer to the site as the Temple Mount.
"We are maintaining the status quo on the Temple Mount: it is those who bring explosives into mosques who are trying to change this status quo," the premier's office said in Thursday's statement.
"We will maintain law and order and call on the Palestinian Authority to cease incitement to violence," Netanyahu said.
Also on Thursday, a Palestinian shot and wounded by Israeli troops last week died of his wounds in hospital in the West Bank city of Nablus, relatives said.
Ahmed Khatabteh, 25, was wounded last Friday in Beit Furik, east of Nablus, in clashes in which another 51 Palestinians were wounded.