The violence, the first major attack in Jerusalem since March, wreaked havoc and left a swathe of damage on Jaffa Road, a main road in Jerusalem.

Traffic was halted, and hundreds of people fled through the streets in panic as medics treated the wounded.

Three Palestinian militant groups claimed responsibility for the attack, but Israeli police referred to the attacker as a "terrorist" acting on his own.

Israeli police said the man was a bulldozer operator who worked in the area for a local construction firm.

The attack took place in front of a building housing several media outlets. BBC footage captured the bulldozer crushing a vehicle and an off-duty soldier shooting the perpetrator in the head several times at point-blank range as onlookers screamed.

Half-a-dozen cars were flattened and others were overturned by the Caterpillar vehicle. A bus also was overturned, and another bus was heavily damaged.

Israel's national rescue service confirmed three deaths.