An Israeli soldier has died from wounds suffered in an overnight shooting in occupied East Jerusalem, the Israeli army has announced.

"Overnight, an IDF (Israel Defense Forces) soldier was killed as a result of being critically injured by a shooting attack" on Saturday night at a checkpoint near the Shuafat Palestinian refugee camp, the army said in a brief statement.

Earlier, an Israeli police spokesperson said an assailant "shot and severely injured two Israelis" at the checkpoint.

Israeli forces said the wounded included a female Israeli soldier and a security guard.

An AFP news agency journalist saw a woman dressed in military uniform being treated in one of two ambulances in attendance.

Dozens of officers were deployed around the crossing and inside the refugee camp, where fireworks were launched.

The force said it had deployed a helicopter and special forces as part of the manhunt.

READ MORE: More Palestinians killed by Israeli forces in occupied West Bank

Killings of Palestinians continue 

The shooting came at a time of heightened Israel-Palestine violence, just hours after a pair of Palestinian teenagers were killed in an Israeli military raid in the occupied West Bank.

The violence has made 2022 the deadliest year of violence in the occupied territory since 2015.

Israel has occupied East Jerusalem since the 1967 Six-Day War and later annexed the territory in a move not recognised internationally.

Earlier on Saturday, the Palestinian Red Crescent Society said its medics treated five people near the Old City of East Jerusalem, including one who was hit with a rubber-coated bullet.

Israeli police said the force arrested seven children and one adult suspected of "participating in unrest.

Rights groups accuse Israeli forces of using excessive force in their dealings with the Palestinians, without being held accountable.

READ MORE:Israeli troops kill teens, wound dozens in Palestine's West Bank