A security guard at the Israeli embassy in Amman, Jordan, opened fire killing two Jordanians after one of them attacked him with a screwdriver, Israel's Foreign Ministry said in a statement.
The Israeli guard was also injured in the incident, which took place in Jordan's capital Amman on Sunday (23 July) evening.
One Jordanian man was pronounced dead upon being taken to a nearby hospital. The second was declared dead in the early hours of Monday.
It is believed that the Jordanian government is asking to conduct an independent investigation into the incident and has prevented Israeli embassy staff from leaving the premises.
Israel's Foreign Ministry did not comment on the demand, but said in its statement that the security guard at the embassy has diplomatic immunity, AP reported.
Jordan's Public Security Department (PSD) said preliminary investigations indicated that the two Jordanians had entered the embassy's compound to do carpentry work, news agency Petra reported.
Israeli officials said one of the workers, identified by Israeli media as a 17-year-old, attacked the Israeli security guard with a screwdriver.
Tensions over holy site
The incident occurred as tensions are running high after Israeli implemented new security measures around a religious site in Jerusalem, holy to both Jews and Muslims.
The site, administered by Muslim authorities, is known to Muslims as Haram al-Sharif and to Jews as the Temple Mount, and is home to the al-Aqsa mosque and the Dome of the Rock.
Israeli police installed metal detectors at the site and placed a temporary ban on Muslim men under the age of 50 from entering the area, following the death of two Israeli police officers. They were shot dead by Israeli-Arab gunmen in the surrounding area on 14 July.
The restrictions triggered protests from Palestinians, who see the move as a punitive measure, and sparked violent clashes between Palestinians and Israeli security forces.
Muslim authorities claimed the move is a way for Israel to expand its control over the site, something denied by Jerusalem, which said the decision aims to to prevent further violence.
Israel's security Cabinet held a meeting to discuss new security measures as well as recent violence including the incident at the embassy in Amman. However, it said on Monday that it had reached no decision, AP reported.
The incident at the embassy is likely to further complicate the crisis over the holy site and strain relations between Israel and Jordan.
Jordanians took to the streets of Amman last week to protest against Israeli policies at the shrine.
Members of the Arab League will hold an emergency meeting over the crisis on Thursday ( 27 July), the Jordan Times reported.
Arab League secretary-general Ahmed Aboul Gheit warned Israel was "playing with fire".
"Jerusalem is a red line that Muslims and Arabs cannot allow to be crossed ... and what is happening today is an attempt to impose a new reality on the Holy city," he said in a statement quoted by Reuters.
"The Israeli government is playing with fire and risking a major crisis with the Arab and Islamic world."