"A group of Jewish worshippers were attacked as they walked...To Beit Horot," a police statement said, referring to a Jewish seminary set up on the Mount of Olives by ultranationalist rabbi Benny Elon in 1999.
One man was stabbed in the back and the second hit with a blunt instrument, apparently an iron bar.
On Tuesday, two Palestinians attacked a synagogue in west Jerusalem, killing four worshippers and fatally wounding a policeman who arrived at the scene.
The killings hiked tensions in Jerusalem, already the site of months of unrest.
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Tensions have been rising in Jerusalem since the bodies of three kidnapped young Israelis were discovered in late June, leading to a revenge attack in which a Palestinian teenager was abducted and burned alive.
A spate of "lone wolf" attacks by Palestinians, reprisals by hardline Jews and a growing focus on religious confrontation have left both sides living in dread of what will come next.
Palestinians have been angered by the efforts of hardline Jewish activists to overturn a long-standing ban on Jews praying at the Al-Aqsa mosque compound, with unrest further fuelled by a slew of new Israeli settlement projects in east Jerusalem.