A Palestinian man was shot dead by Israeli border police after killing two Israelis and injuring another two in a stabbing attack on Saturday in Jerusalem's Old City, police said.
The attacker stabbed a man, two women and a toddler on Saturday night amid growing violence in East Jerusalem and occupied West Bank. One woman was in critical condition and the toddler was slightly wounded, police said. Two Israeli men died of their wounds.
"We are deep inside a wave of terror and incitement," Israeli Intelligence Minister Yisrael Katz told Channel Two's Meet the Press show.
Israeli police identified the man as Muhannad Halabi, who was 19 years old and from al Bireh, a Palestinian city close to Ramallah in the central West Bank, 15km north of Jerusalem.
Palestinian militant group Islamic Jihad, issued a statement claiming the attacker was a member of the group.
The attacker reportedly stole a gun from one of the wounded and fired several shots at police and tourists before being killed by Israeli police.
"The terrorist approached a group of Jews, whipped out a knife and began stabbing," police spokesman Micky Rosenfeld said.
Jerusalem Police Chief, Moshe Edri said the Palestinian man "stabbed an Israeli man, his wife and the toddler" several times in an alleyway before stabbing another man.
The victims were passing near the entrance of the Al Aqsa Mosque compound. After the attack, Israeli soldiers raided Al Aqsa Mosque and arrested at least 40 people.
Israel’s Prime Minister, Benjamin Netanyahu called for an emergency meeting with security officials to be held on Sunday and a cabinet meeting on Monday to implement severe measures after the latest incident.
The United Nations Special Coordinator for the Middle East Peace Process, Nickolay E Mladenov condemned the incident in his post on Twitter.
"I condemn the brutal terror attack that killed two Israelis in Jerusalem, call on all to stand firm against incitement, prevent escalation," he posted.
In recent weeks, the violence has been growing in East Jerusalem and West Bank. Israeli police and Palestinians clashed several times at Al Aqsa Mosque compound in East Jerusalem, after Israeli soldiers forcefully entered the compound.
"According to what I see, the third Intifada has started," the attacker who killed two Israelis in the stabbing attack posted on his Facebook page on Friday, citing the tension that has been building at Al Aqsa.
On Thursday, an Israeli couple was killed by an alleged Palestinian attacker in a car, along with their four children in the West Bank.
On Saturday, Israeli soldiers raided Palestinian city of Nablus, arrested seven people and injured ten others, Palestinian and Israeli sources reported.
Settler leaders protested outside Netanyahu’s residence in Jerusalem on Friday, calling for tighter security measures in the West Bank. Intelligence Minister, Yisrael Katz said if the violence continued to grow, the government would discuss canceling work permissions for Palestinian laborers in Israel and restoring military roadblocks which were removed in the recent years in the West Bank.