Seven people were shot dead and more than three others injured at a synagogue in East Jerusalem, the most killed in an attack of this kind for years.
The shooting happened in the city's Neve Yaakov neighbourhood at about 20:15 local time (18:15 GMT).
Police described the attacker as a "terrorist" and said he had been "neutralised", reports BBC.
Local media identified him as a Palestinian man from East Jerusalem.
Israeli police commissioner Kobi Shabtai called it "one of the worst attacks we have encountered in recent years".
Israeli worshippers had gathered for prayers at the start of the Jewish Sabbath in a synagogue in the Jewish settlement and were leaving when the gunman opened fire. Police say that officers then shot him dead.
Forensic teams are investigating a white car that appears to have been driven by the gunman.
The attack was celebrated by Palestinians in the West Bank and the Gaza Strip with rallies and the handing out of sweets.
Bd-pratidin English/Golam Rosul