While I agree with your point, there are rumours throughout the Muslim world that Israel's intends to one-day raze Al-Aqsa and rebuild the Temple.

1) Israel can not be held responsible for random rumors. I put that in bold because it's important.

2) The tiny, vocal, minority of Jews who want rebuilt the temple on the location of Al-Aqsa are not helping. They do stunts like raise money through crowd-funding, which makes a lot of noise and makes all Muslims edgy. There's videos on Youtube showing how they intend to destroy Al-Aqsa and build a new Temple over it. That doesn't help and the videos go viral in the Muslim world, for all the bad reasons.

3) Politicians that cater to the right-er side of the political spectrum push for more open access to the Temple Mount for Jews. Correct me if I'm wrong but I believe mainstream Judaism encourages Jews not to go on the Temple Mount. This is mostly political stunts meant to score points on the more extreme side of Israel's electorate. Again, doesn't help.

I guess my point is that Israel shouldn't be held responsible for the fear Mulsims have that Al-Aqsa will be razed in the near-future, especially as I've heard the more secular, serious and intelligent leaders of Israel saying that the status of Al-Aqsa can not and should not be challenged (Ex-leaders of Shin Bet and Mossad, the ones that don't have to play politics and talk a lot of crap to score points).

It should however also be stressed that Israel isn't even trying to diffuse religious tensions around Al-Aqsa, as shown in points 2) and 3). People who think the current situation is bad have no idea of the actual shitstorm that would hit the world if Al-Aqsa was razed. By letting the religious crazies live their fantasies of a Third Temple, Israel may inadvertantly allow a Rabin-assassin-like loner to set fire or bomb Al-Aqsa (some already tried in 1984). No one, especially Israel, wants something like that to happen.