A Palestinian stabbed and wounded two Israelis in annexed east Jerusalem on Friday before being shot dead, police said, despite tight security for Ramadan.
One of the Israelis was in a critical condition and the other suffered serious wounds, police spokesman Micky Rosenfeld said.
"Police units that responded at the scene saw the attacker with a knife. The attacker was shot and killed by police units," Rosenfeld said.
Police identified the assailant as a 19-year-old Palestinian.
The Old City, where the attack took place, has been the scene of numerous stabbings of Israelis by wildcat Palestinian assailants in recent years.
The first Israeli was stabbed near Damascus Gate. The second was attacked near Jaffa Gate on the other side of the walled city.
Security has been stepped up across Jerusalem during the Muslim holy fasting month of Ramadan.
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Tens of thousands of believers were expected to gather at the Old City's politically contentious Al-Aqsa mosque compound later for the last Friday prayers of Ramadan.
The attack came just two days before Israelis hold a major march to mark Jerusalem Day, the annual commemoration of the capture of east Jerusalem in the Six-Day War of 1967.
It was later annexed in a move not recognised by the international community.
In December 2017, US President Donald Trump broke with decades of bipartisan policy to recognise Jerusalem as Israel's capital in a move that prompted the Palestinians to cut all contacts with his administration and which has sent tensions soaring.
Israel insists the whole of Jerusalem is its "eternal, indivisible capital". The Palestinians demand the city's eastern sector as the capital of their long promised state.
On Thursday evening, Trump's son-in-law and adviser Jared Kushner met Israeli Prime Minister Benjamin Netanyahu in Jerusalem as part of a Middle East tour before Washington unveils its long-awaited plan for Israel-Palestinian peace.
Kushner, accompanied by Trump envoy Jason Greenblatt, arrived in Jerusalem after earlier stops in Morocco and Jordan.
He is a key architect of the peace plan that the White House says it intends to present in the coming weeks.
But the plan, previously delayed for an Israeli general election on April 9, could face further postponements due to Israeli politics.
Israel is set to hold another general election in September after Netanyahu failed to form a coalition government, and the plan is widely seen as too sensitive an issue to introduce during a political campaign.
The Palestinian leadership has rejected the peace plan without seeing it, saying Trump has shown himself to be blatantly biased in favour of Israel.
They cite moves including declaring the disputed city of Jerusalem Israel's capital and cutting hundreds of millions of dollars in Palestinian aid.
Trump has also handed Netanyahu other diplomatic coups, notably US recognition of Israel's 1981 annexation of the strategic Golan Heights captured from Syria in the Six-Day War.
On Thursday, Kushner delivered Netanyahu a gift from Trump, a map of Israel signed and approvingly annotated by the US president showing the Golan as inside the Jewish state's borders.