Israel installed metal detectors at entrances to the Haram al-Sharif mosque compound, known to Jews as the Temple Mount, after an attack on July 14 that killed two policemen.
But after protests and intensive international diplomacy to prevent further unrest, the government removed the detectors from the site.
"Israel took the right step to remove the metal detectors to help lower tension," Erdogan said.
"But is it enough according to our wishes? No, it is not," he said at a meeting on further education in the Islamic world in Ankara.
Palestinians viewed the new security measures as Israel asserting further control over the site, which is central to the Israeli-Palestinian conflict.
Clashes broke out during protests, leaving five Palestinians dead.
"The Israeli government want to destroy the Islamic character of Jerusalem with a new practice every day," Erdogan said.
There were tit-for-tat statements from both sides after Erdogan criticised Israel on Tuesday and accused it of "attempting to take the (Al-Aqsa) mosque from Muslim hands".
The Israeli foreign ministry said in a statement that his comments were "mind-blowing, false and distorted".
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