Jerusalem, Nov 5 (IANS): A Palestinian motorist rammed his vehicle into pedestrians and later assaulted them with an iron rod in Jerusalem Wednesday, leaving at least eight people injured, before being shot dead by police.

"A commercial vehicle hit and ran over pedestrians who were standing at a light rail train station in Jerusalem," a police spokesperson said in a text message to Xinhua.

The man was shot and killed by paramilitary border police, the police said, dubbing it a "terror attack".

Magen David Adom of Israel's Red Cross told Xinhua that three people were severely wounded in the incident, one of whom was in "critical condition" and has been transferred to hospital.

Eyewitnesses told Israel Radio that the man rammed his car into a group of people who were coming out of a light rail stop. He drove on until his vehicle hit some cars that were parked at the site. He then got out of his vehicle and attacked people at the scene with an iron rod.

The incident, the second in two weeks, took place at a time of increasing tension between Jews and Arabs in Jerusalem.

Last week, a baby and a woman were killed when a Palestinian crashed his car into a light rail station in Jerusalem. The driver was later shot by police and died of his wounds in hospital.

Tension has been building up since July when Jewish extremists kidnapped and killed a 15-year-old Palestinian resident of East Jerusalem.

There have since been clashes almost daily with East Jerusalem Palestinian residents hurling stones and firebombs at Israeli security forces, as well as random attacks by Jewish extremists on Arab bystanders.