Medics in the besieged Palestinian enclave reported five Israeli airstrikes on Rafah early on Thursday that hit at least three houses, killing at least six people including a local journalist
Tension has been high in Jerusalem and witnesses offered contradicting accounts about whether the flames were caused by Palestinians who had thrown fireworks at police or by a police stun grenade.
Israeli police said in a statement the fire was started by the fireworks. A spokesman did not say whether officers had been throwing stun grenades at the time.
The tree was about 10 metres from the mosque, Islam's third holiest site.
Israeli police and Palestinians had clashed outside the mosque earlier in the day but the scene was relatively calm after the fire was put out, with people returning to prayer.