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Two Israelis - a six-year-old boy and 20-year-old man - have been killed in a car ramming attack at a bus stop in occupied East Jerusalem, officials say.

The attack happened at Ramot Junction. Police say the driver, a 31-year-old Palestinian from East Jerusalem, was "neutralised on the spot".

Five people were hurt, medics said.

It comes amid a particularly bloody period between Israelis and Palestinians, with a mounting toll from Palestinian attacks and Israeli raids.

Pictures from the scene of the incident on the northern outskirts of the city show a blue Mazda car which had crashed into a pole and come to a standstill on the pavement under a bus shelter.

A volunteer medic with an ambulance service told Israel's Army Radio: "Everyone was lying out, thrown about, in very bad condition."

Israeli Prime Minister Benjamin Netanyahu had "decided to take immediate action to seal and demolish the home of the terrorist", his office said.

Friday's attack is the latest in a spate of deadly incidents over the past couple of weeks which have ratcheted up tensions between Israel and the Palestinians.

Late last month, 10 Palestinians, including two civilians, were killed in the occupied West Bank city of Jenin in an Israeli raid against militants that Israel said were planning an imminent attack. Hours later, a Palestinian gunman opened fire on Jewish worshippers and passers-by outside a synagogue in East Jerusalem, killing seven.

The following morning, a 13-year-old Palestinian shot a group of people, also in East Jerusalem, wounding an Israeli father and son.

During the past week, five Palestinian militants - some of whom Israel said had carried out a shooting attack at an Israeli restaurant - were killed in a gun battle with troops near the West Bank city of Jericho. Two Palestinians, whom Israel said had stabbed and shot at soldiers, were also shot dead by Israeli forces in the West Bank on Tuesday and Thursday.

It brings to at least 39 Palestinians killed by Israeli forces in the West Bank so far this year, including militants and civilians, as a nearly year-long military operation against militants there continues. Eight Israelis and one Ukrainian have been killed in attacks by Palestinians also since the start of this year.