The warning came after Israel sent extra troops into the occupied West Bank as violence erupted over Israel’s installation of metal detectors at entry points to the al-Aqsa Mosque compound.
"Quds (Jerusalem) is a red line that Muslims and Arabs cannot allow to be crossed ... and what is happening today is an attempt to impose a new reality on the Holy city,” Arab League secretary-general Ahmed Aboul Gheit said in a statement, the Independent reported.
"The Israeli government is playing with fire and risking a major crisis with the Arab and Islamic world.”
Arab League foreign ministers will hold emergency talks in Cairo on Wednesday, the group said in a statement.
On Friday, several thousand Palestinians clashed with Israeli security forces in the West Bank and in Quds after noon prayers. Three Palestinians were killed and several dozen wounded when Israeli troops responded with live rounds, rubber bullets and tear gas.