Police in Jerusalem have shot and killed the driver of a vehicle who rammed a lorry into a group of pedestrians, injuring at least 15 in a "terrorist attack", according to reports.

The incident happened near the Armon Hanatziv Promenade overlooking the walled Old City of Jerusalem, killing three people and injuring at least 15, police and the ambulance service said, describing it as a deliberate attack.

Police tweeted that the truck driver apparently targeted a group of Israeli soldiers who had just gotten off a bus.

"It is a terrorist attack, a ramming attack," a police spokeswoman said on Israel Radio, which reported that bodies were "strewn on the street", according to the Guardian.

Photos taken at the scene show a Mercedes truck with windows riddled with bullet holes and police said the driver had been "neutralised."

People were initially trapped under the vehicle and among the dead are three women and a man in their twenties, according to Haaretz. The area has been cordoned of to traffic as police begin their investigation.

The Magen David Adom ambulance service said 15 people were hurt and at least two were seriously injured.

Palestinian media have identified the Jerusalem truck driver attacker as Fadi al-Qanbar from the East Jerusalem neighbourhood of Jabal Mukabar. Hamas spokesman Hazzem Qassem wrote on Facebook: "The continuous operations in the West Bank and Jerusalem prove that the Jerusalem Intifada is not an isolated event, but rather a decision by the Palestinian people to revolut [sic] until it attains its freedom and liberation from the Israeli occupation."

He addded: "These operations demonstrate that all attempts to bypass the resistance or to thwart it will fail every time."

Jerusalem Mayor Nir Barkat promised retaliation for the attack. "Those who incite and inflame and those who support terror must pay a heavy price. I call on all the residents of Jerusalem and the country to continue their lives as usual and to not let terror win."

Truck-ramming incident in Jerusalem
An Israeli policeman walks by the scene of a truck-ramming incident in Jerusalem 8 January, 2017Reuters