More than 2,000 Palestinians and 150 Israeli peace activists have clashed with Israeli soldiers in Al-Ram, north of Jerusalem, during a rally against the Israeli separation barrier.

Soldiers on Saturday fired tear gas and rubber bullets to disperse the demonstrators after some protesters threw rocks at them, an AFP photographer witnessed.

It was the second straight day of violent clashes over construction of the barrier.

On Friday, 10 people were injured in the West Bank village of Bilin, near Ramallah. An Australian activist was hospitalised after being shot in the head with a rubber bullet and an AFP photographer was shot in the hand.

Hundreds of foreign peace activists and Palestinians demonstrate at least once a week against the separation barrier, which Israel insists is necessary to prevent infiltration by West Bank militants.

The Palestinians say the controversial project is an attempt to grab their land and undermine the viability of their promised state.

Many of the demonstrators on Saturday were also there to commemorate the 58th anniversary of the 1948 Israeli occupation which falls on May 15, a day Palestinians call the Nakba, or catastrophe.

PHOTO CAPTION

Israeli soldiers arrest a demonstrator during a rally against the Israeli separation barrier in Al-Ram, north of Jerusalem. (AFP)