Two people were killed and two others injured on Saturday evening in Jerusalem's Old City after police said a "terrorist" launched an attack using a knife and gun.
In a statement, Israeli police said a man stabbed several people near Lion's Gate before taking a gun from one of the wounded and shooting into a crowd of tourists.
A woman who had been stabbed managed to seek help from the police, who eventually fatally shot the man.
Police said two of those injured died from their wounds, while two others, the woman and a young infant, were being treated in hospital.
Three of those attacked were said to be members of one ultra-Orthodox family and had been making their way to the Western Wall when the attack occurred, police said.
"The police acted firmly and prevented the continuation of injury to innocent persons," Police Commander of the Jerusalem District Moses Adri said in a statement.
The commander said police would increase their presence in the old city and its many alleyways.
A senior member of the Palestinian Islamic Jihad group told Agence France-Presse one of its militants -- said to be 19-year-old Mohannad Shafik Halabi -- was behind the attack.
The attack came two days after an Israeli couple were shot dead in their car in front of their four children near the northern West Bank city of Nablus.
In the wake of that incident, Prime Minister Benjamin Netanyahu promised to increase security for all Israelis.
Writing on Facebook, opposition leader Isaac Herzog said Netanyahu had lost control of security in the country.
"The government has no plan for the war on terror," he wrote. "It's crystal clear to every Israeli citizen."
The U.S. State Department issued a statement Saturday and expressed concern over violence and increasing tensions.
"The United States strongly condemns all acts of violence, including the tragic stabbing in the Old City of Jerusalem today that left two victims dead and two injured. We call for all perpetrators of violence to be swiftly brought to justice," the statement read. "We are very concerned about mounting tensions in the West Bank and Jerusalem, including the Haram al Sharif/Temple Mount, and call on all sides to take affirmative steps to restore calm and avoid escalating the situation."
Tensions have flared in recent weeks between Israelis and Palestinians over a holy site in Jerusalem known to Jews as the Temple Mount and to Muslims as the Al Aqsa Mosque.
In speeches to the U.N. General Assembly this week, Netanyahu and Palestinian President Mahmoud Abbas both made reference to the site, which has been the scene of regular clashes.