Police did not say whether the Jews had violated the prohibition for them to pray at the site, but a video circulating online shows a scuffle between police and Muslim worshippers when two Jews prostrate themselves on the esplanade.
The compound, known to Muslims as the Al-Aqsa mosque and to Jews as the Temple Mount, is holy to both religions.
It is Islam's third holiest site and Judaism's holiest.
Jews are allowed to visit the site but not to pray there, and incidents occur regularly when Jews try to ignore the rule and Muslims intervene to stop them.
Two Palestinian employees of the Islamic "waqf" foundation which administers the site were briefly detained on Tuesday for "assaulting Jewish visitors", police said, without saying whether this was related to the incident shown in the video footage.
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Waqf director Sheikh Azzam Khatib told AFP that an Al-Aqsa mosque guard and a foundation employee were arrested.
"Police claim that one of them assaulted an officer," he said.
There is a boosted Israeli security presence at the site for the Jewish week-long Passover holiday, when tens of thousands of Jews flock to the Old City.
Tensions are high in Israel following a wave of violence that has killed 201 Palestinians and 28 Israelis since last October.
Most of the Palestinians killed were carrying out knife, gun or car-ramming attacks, according to Israeli authorities.
Palestinians argue that Israel is seeking to change the status quo at the Al-Aqsa compound, claims that Prime Minister Benjamin Netanyahu and other ministers have repeatedly denied.