A resident of east Jerusalem wounded on Monday five pedestrians in the city centre before being shot dead, in what Prime Minister Benjamin Netanyahu called a "terrorist attack".
The Magen David Adom emergency service said those hurt included a 70-year-old man who was left in a "serious condition", as well as a 30-year-old woman.
Police said the driver, a man in his 30s, was a resident of Beit Safafa."A citizen who witnessed the incident and was near the scene shot and neutralised the terrorist," police said in a statement, adding the driver was "pronounced dead at the scene".
The incident took place near the usually bustling Mahane Yehuda market in west Jerusalem.
The prime minister described the event as a "terrorist attack", as Israel prepared to mark the 75th anniversary of its founding this week.