Witnesses reported ugly scenes as protesters fired rockets, set alight tyres and threw stones at soldiers drafted in to bolster security.
All those wounded were said to be Palestinians struck by tear gas canisters, rubber bullets and live ammunition.
Israeli military sources said two rockets fired from the Gaza strip towards their territory fell short.
Critics said the conflict was inevitable following President Trump’s sudden decision to go ahead with a campaign promise to recognise Jerusalem as the Israeli capital.
The move – which snubs the Palestinians’ claim on the city – was condemned by world leaders including Theresa May.
Further bloodshed is expected today after Ismail Haniyeh, leader of the Palestinian militants Hamas, called for a “day of rage”.
He said the “satanic” US-Israeli alliance had to be confronted by a Palestinian “intifada”, or uprising.
The Hamas chief added: “Palestine will not be divided and the whole of Palestine and the whole of Jerusalem are the property of the Palestinian people.
“It is a declaration of war against our Palestinian people in the holiest of holy places of the Christians and Muslims.”
Yesterday’s worst violence broke out in Ramallah, Bethlehem and Hebron in the West Bank.
One early report said 11 people were hit by live rounds and 20 by rubber bullets.
That figure is thought to have increased throughout the day.
America’s policy change – which will involve moving the US Embassy from Tel Aviv to Jerusalem – triggered chants of “Death to America! Death to the fool Trump!” Police spokesman Micky Rosenfeld said: “We’ve dealt with much larger [protests], in terms of number, scale, size, seriousness.”