"We are battling a storm of rare ferocity," Mayor Nir Barkat said in a statement as snow in the Holy City piled up to around 37 centimetres (15 inches), while outlying areas had much deeper drifts.
One weather forecaster described the snowstorm as "historic" on public radio.
Temperatures in the city were predicted to reach a high of two degrees celsius (35.6 Fahrenheit) today and drop below freezing at night, with snowfall that started yesterday continuing into Saturday.
Jerusalem municipality said that 540 stranded motorists were given shelter at the city's International Conference Centre.
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Main roads into the Holy City, which climb around 795 metres (2600 feet) above sea level were closed and police appealed to drivers of private vehicles not to attempt the journey. Many streets in the city were also impassable.
"Only when the storm has eased can we start clearing roadways," Barkat said. "We are at the moment using all means to rescue those caught in the storm."
Ramallah and Bethlehem, Palestinian cities near Jerusalem, were also coated in snow and some lower-lying areas suffered flooding from torrential rain.