With huge crowds expected in the cramped alleyways of the Old City, the restrictions - which will slash the number of worshippers to one-fifth its size in recent years - are aimed at ensuring safety for thousands of Christian worshippers.
They say numbers who can attend Saturday’s Holy Fire ceremony at the Holy Sepulchre Church are being limited to 1,800, down from 10,000 last year.
The police, who control security in occupied East Jerusalem, say they are ensuring safety and freedom of worship.
Church officials are now urging Christians to ignore the restrictions.
The Holy Fire ritual can be traced back centuries and typically takes place amid packed crowds in the holiest site in Christianity.
During the ceremony, the Greek Orthodox Patriarch accompanied by the Armenian Patriarch enters a small room above what is believed to have been the tomb of Jesus.
He emerges with candles said to have been lit by a miracle and the flames are quickly shared around the packed church and with local Christians and foreign pilgrims waiting in the narrow streets nearby. It is transported to local Orthodox churches and even flown overseas.
In a joint statement, church leaders said the Israeli authorities were “enforcing unreasonable, and unprecedented restrictions on access to the Holy Sepulchre – more so than last year”.
They added that these would particularly affect the local Christian community.
There is criticism of the police’s decision to locate 200 officers inside the church building.
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