The group was heading towards the Temple Mount, al-Haram al-Sharif, when they were stopped by Israeli police.
They were carrying a goat that they are believed to have intended to sacrifice in connection with the Jewish holiday of Pesach.
Ultra-religious groups have attempted to carry out similar biblical sacrificial rituals on the Temple Mount on several occasions in recent years. The site is home to holy sites in Judaism, Christianity and Islam - including the important Al-Aqsa Mosque - and has been at the center of the struggle for Jerusalem for centuries.
Carrying out biblical sacrificial rituals at the site is therefore seen as a provocation that could lead to increased religious tensions between religious communities.
The 21 arrested have now been released after questioning.
