It is well known that the Prophet Muhammad (peace and blessings be upon him) has a very special status among all prophets and messengers of Allah. Thus, it is no wonder that he led all the prophets and messengers in Prayer on the night of Al-Israa’ and Al-Mi`raj. Not only that, but it also indicates that the sovereignty over that holy land and the surrounding places should be restricted to Muslims
The fact that Angel Jibreel (Gabriel) let the Prophet (peace and blessings be upon him) lead all the prophets in Prayer in Al-Aqsa Mosque on the night of the Prophet’s Ascension has much significance as follows:

1. All the prophets who were sent to the Children of Israel, including Musa (Moses), willingly submitted to be guided and led by the Prophet Muhammad (peace and blessings be upon him). The Prophet (peace and blessings be upon him) is reported to have said in his hadith, “If Musa ibn `Imran were resurrected among you now, he would just follow me.”

2. It is an indication that sovereignty over that holy land and the surrounding places should be restricted to the Muslims who, in turn, should accept no bargaining, nor should they show any relinquishment regarding this issue.

3. It indicates close connection between the Sacred Mosque and Al-Aqsa Mosque. So whoever honors the sanctity of the Sacred Mosque and observes establishing its rituals should also endeavor to establish and observe the rituals of Al-Aqsa Mosque.

4. This event indicates the preference given by Allah to Prophet Muhammad (peace and blessings be upon him), the Seal of the Prophets, over all other prophets. Almighty Allah says: “Of those messengers, some of whom We have caused to excel others …” (Al-Baqarah: 253), “… And We preferred some of the Prophets above others…” (Al-Israa’: 55), and “That is the bounty of Allah; which He giveth unto whom He will …” (Al-Jumu`ah: 4)

Based on a Fatwa issued by the prominent Al-Azhari scholar Dr. Ja`far Ahmad At-Tahlawi

http://www.onislam.net/english/shariah/muhammad/reflections/447392.html