Two people have been killed and three others wounded in a terrorist attack near the Lion's Gate in Jerusalem's Old City on Saturday (3 October) night, shortly after the end of Shabbat. Several of the victims are members of the same family.

A 40-year-old man was transported to Jerusalem's Shaarei Tzedek hospital in a critical condition after suffering multiple stab wounds, but was pronounced dead shortly after. One other victim also succumbed to his wounds.

The terrorist was shot by security forces, and later died of his wounds. The stabbing comes just 48 hours after a deadly shooting by a Palestinian terrorist in the West Bank, which left 25-year-old Danny Gonen dead.

Violence erupted between Palestinians and the Israeli police after raids on Jerusalem's Al-Aqsa Mosque compound. A Palestinian stabbed a border policeman in the neck near Jerusalem's Damascus Gate leaving the officer critically wounded.

The attack occurred when the officer was stationed at the Old City's northern entrance where tens of thousands of Muslims have passed through for Ramadan, which commenced last week. Emotions are running high as Jewish groups prepare to enter the site during the holiday and Muslims are worried by increased visits by Jews, fearing the rules governing the compound could be altered. The area is the third holiest site in Islam and is also sacred to Jews, who refer to it as Temple Mount.

"The terrorist, who is 20 years old and from Hebron, stabbed him from behind in the neck, critically wounding the officer, who drew his pistol and was able to shoot him," said Police spokesman Micky Rosenfeld shortly after the attack.

The officer, who was treated at the scene by Magen David Adom paramedics, was then rushed to Shaare Zedek Medical Centre where he underwent emergency surgery, and has been upgraded to serious-but-stable condition, Rosenfeld said.

The terrorist was transferred to Hadassah University Medical Centre in Ein Kerem in serious condition. Rosenfeld said police units immediately cordoned off the area to prevent more attacks, before confirming that the suspect acted alone.

"Police determined it was a lone wolf attack, and carried out security assessments in and around the Old City to ensure order was restored and no more incidents take place as Ramadan continues," he said. "A joint investigation with the Shin Bet [Israel Security Agency] into how the terrorist came from Hebron to Jerusalem to carry out the attack has been launched."

Shortly after the attack, Jerusalem Mayor Nir Barkat issued a statement condemning the violence and praising the officer's quick response. "I want to commend the action of the border policeman, who, while injured, kept his cool and shot and neutralized the terrorist, thus saving lives and preventing further injuries," Barkat said. "We all pray for his recovery. We must persist and continue our daily routines," the mayor continued. "I ask all the citizens of Israel to continue to visit Jerusalem and strengthen it."

Former foreign minister Avigdor Liberman (Yisrael Beytenu) said the situation is the result of Palestinian incitement coupled by Israeli inaction. He said: "The series of terrorist acts we are witnessing in recent times... are the result of a combination of incitement by the Palestinian Authority and inaction and weakness exuded by the Israeli government."