Some 200 people, most of them Palestinians, took part in the anniversary demonstration which was dispersed after some protesters threw stones at troops, an army spokeswoman said.
It came with tensions running high in the Hebron region after scores of Palestinians were killed in a new upsurge of violence since last October.
Many were killed during attacks or attempted attacks on Israelis, but others were shot dead during demonstrations. The majority were youngsters, some as young as 13.
A few hundred Jewish settlers live under heavy army guard among several hundred thousand Palestinians in the heart of the West Bank's most populous city.
The Ibrahimi Mosque, where Baruch Goldstein killed the 29 worshippers in 1994, is also revered by Jews as the Cave of the Patriarchs and has been a constant source of division.
Since October 1, Palestinian knife, gun and car-ramming attacks have taken the lives of 27 Israelis, an American and an Eritrean, according to an AFP count.
At the same time, 175 Palestinians have been killed by Israeli forces.
Israel blames incitement by Palestinian leaders and media as a main cause of the violence.
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