"After works which lasted seven years, the last part of the tunnel, which is 600 metres long and was used for draining rainwater during the Second Temple period, has been cleared," an Israel Antiquities Authority (IAA) spokesman said.

He told AFP the project was "purely archaeological" and that the tunnel "does not go under the Temple Mount" -- the Jewish term for the site which formerly housed the Second Temple but is now the site of the mosque plaza.

The tunnel leads to the City of David, an archaeological site run by ideological Jewish settlers located in the volatile neighbourhood of Silwan which lies just outside Dung Gate, immediately south of the Old City walls.

The project, which began in 2004, sparked controversy due to its proximity to the mosque compound and its funding from Elad, a hardline settler group which seeks to expand Jewish presence in occupied and annexed east Jerusalem.

"Over the years, the tunnel was partially opened to the public. Soon it will be completely opened," the spokesman added.

Uzi Dahari, the IAA deputy director, told public radio there was "no intention of igniting inter-religious tensions" and that it was "an archaeological project which shows how the city used to work."

At the moment, the tunnel can only be accessed from the Silwan side, but there are plans to create an exit at the other end in the coming months.

Construction work in the Old City, particularly around the Western Wall which backs onto the Al-Aqsa mosque compound, and one of the most contentious sites in the Israeli-Palestinian conflict.

In 1996, during Israeli Prime Minister Benjamin Netanyahu's first term of office, more than 80 people were killed in three day riots after he authorized a new opening into an ancient tunnel along the mosque compound's western flank.

Huge protests also erupted when Israel began repair work on a damaged stone ramp leading to the Al-Aqsa mosque compound, enraging Muslims around the world.

Israel occupied and later annexed east Jerusalem, which includes the Old City, during the 1967 Six-day War and considers it to be its "eternal and indivisible capital."

But the Palestinians oppose any extension of Israeli control over the city's eastern sector which they want as the capital of their future promised state.