A Palestinian gunman opened fire in Tel Aviv on Thursday, wounding three before being killed by police in what Israeli Prime Minister Benjamin Netanyahu labelled a "terror attack" amid rising unrest in the West Bank.
Hamas claimed the gunman, a 23-year-old from the occupied West Bank, as a member.
Police cordoned off a corner of Dizengoff Street in the city centre where the attack took place.
A restaurant was empty after customers apparently fled mid-meal, Reuters footage showed.
Medics treated the wounded on the pavement nearby.
The incident is the latest violence in a year-long wave of fighting that shows no signs of slowing.
Dizengoff Street, a popular thoroughfare filled with shops and restaurants.
The city was crowded on Thursday night, the start of the Israeli weekend, and occurred as anti-government protests were taking place.
An image on social media showed what was believed to be the attacker standing in the middle of the road as he pointed a pistol.
Israel protests — in pictures
Earlier on Thursday, three Palestinian militants were killed in a shoot-out with Israeli troops in the northern West Bank.
Israeli security forces said they had raided the village of Jaba to arrest suspects wanted for attacks on soldiers in the area.
The suspects opened fire on Israeli troops, who shot back and killed three people, all affiliated with the Palestinian Islamic Jihad group, police said.
The Palestinian Ministry of Health identified the men as Sufyan Fakhoury, 26; Nayef Malaisha, 25; and Ahmed Fashafsha, 22, and said they were hit by Israeli fire during the military operation.
A fourth man needed hospital treatment with a bullet wound to the head, authorities added.
Israeli police released a photo of assault rifles, pistols, ammunition and explosive devices they said troops had confiscated in Jaba, to the south of the flashpoint city of Jenin.
Gunmen shot down an Israeli drone during the clashes, the military said.
The Jaba militant group said members had opened fire and hurled explosive devices at Israeli forces from a sedan.
Residents said Israeli troops killed members of the group who had been recently incarcerated by Israel and had carried out a recent shooting attack at a nearby checkpoint.
This year has been marked by escalating unrest across the West Bank, as Israeli arrest raids spiral into protracted firefights with armed Palestinians.
On a visit to Israel on Thursday, US Defence Secretary Lloyd Austin told reporters that he had discussed concerns over the upsurge in violence in the occupied West Bank with his Israeli counterpart Yoav Gallant.
The US was “urging everyone to de-escalate”, the defence secretary said, particularly in the run-up to the month of Ramadan, which coincides this year with the Jewish holiday of Passover.
“The US remains firmly opposed to acts that could trigger further instability, including settlement expansion and inflammatory rhetoric,” Mr Austin said. He added that he was “especially disturbed” by settler violence against Palestinians.
“We will continue to oppose actions that put a two-state solution out of reach.”
Prime Minister Benjamin Netanyahu's far-right government, which took office late last year, has already approved thousands of new settlement homes, legalised unauthorised outposts built partially on private Palestinian land and pledged to further entrench Israeli rule over the occupied territory.
Last month, in response to a Palestinian attack that killed two Israelis, a mob of settlers rampaged through the Palestinian town of Hawara and torched dozens of homes and businesses, leaving one man dead.
The Israeli military on Thursday issued a report into the rampage that identified a series of failures, including an insufficient number of soldiers in the area and the need to send reinforcements faster.
It said “lessons were drawn” about co-ordination between the army, police and internal security agents.
“This is a severe incident that took place under our responsibility and should not have happened,” said Israel's military chief, Lt Col Herzi Halevi.
“We will draw the necessary lessons and study them to prevent similar events from reoccurring in the future.”
Mr Austin called for calm, even as the Gaza-based Islamic Jihad issued a veiled threat, saying its fighters would respond to the morning raid “to deter the enemy and avenge the blood of the martyrs”.
Rocket fire from the Gaza Strip has previously followed violence in the West Bank.
The Jaba armed group includes gunmen from various factions, including Islamic Jihad and the armed offshoot of the nationalist Fatah party.
Militants in the village say that Islamic Jihad supports the group and provides members with weapons.
The group is part of a larger trend of emerging armed groups across the West Bank that have been mounting shooting attacks on Israeli soldiers and civilians and opening fire during military raids on their towns, defying the Palestinian Authority.
In areas of the northern West Bank, where much of the fighting has been focused, the PA's control is receding as young Palestinians' hopes dim for statehood.
The streets of Jaba teemed with young Palestinians in black chanting slogans against the Israeli occupation and firing into the air as they held the bodies of militants aloft.
Yousef Hammour, a 28-year-old in the funeral procession, said Palestinian rage at Israel is only intensifying with the stepped-up arrest raids.
“Everyone's in shock, everyone's angry,” said Mr Hammour.
“Every single day, they're killing more and more of us. If they attack us, we'll attack them.”
Earlier in the week, at least six Palestinians were killed in an Israeli raid in the Jenin refugee camp.
The Palestinian Ministry of Health said that 14-year-old Walid Nasser died on Thursday from wounds suffered in Tuesday's raid.
At least 74 Palestinians, about half of them affiliated with militant groups, have died in Israel's raids in the West Bank since the beginning of the year.
During the same time, 14 people, all but one of them civilians, were killed in Palestinian attacks against Israelis.
Israel captured the West Bank, along with the Gaza Strip and East Jerusalem, in the 1967 war — territories the Palestinians seek for their future state.
In the decades since, more than 700,000 Jewish settlers have moved into dozens of settlements in the West Bank and East Jerusalem, which the international community considers illegal and an obstacle to peace.
