Amateur video broadcast on Israeli television stations showed a man dressed in black and pointing an assault rifle walking down a street in Bnei Brak, a Jewish ultra-Orthodox city on the outskirts of Israel’s commercial capital.
Witnesses said he began shooting at apartment balconies and then at people on the street and in a car.
The Magen David Adom ambulance service said the gunman killed at least five people.
“The terrorist was liquidated,” ambulance spokesman Zaki Heller said. It was not immediately clear who shot him.
Israeli media said initially that security services suspected the gunman was a member of Israel’s Arab minority. They later reported that security officials believe he was a Palestinian from the occupied West Bank.
Last week, an Arab citizen of Israel killed four people in a stabbing and car ramming attack in the southern city of Beersheba, before he was shot dead by a passerby. Israeli authorities said he was an Islamic State sympathiser.
On Sunday, as an Israeli-Arab summit convened in southern Israel, an Arab assailant, a resident of a town in the north of the country, shot and killed two police officers in Hadera, a city some 50 km (30 miles) north of Tel Aviv. Other officers shot and killed him.
Islamic State claimed responsibility for the Hadera attack.
With inputs from NDTV