Three people were killed in a shooting attack in Tel Aviv's popular Sarona Market Wednesday evening.
Four others were seriously hurt, with another person said to be in critical condition.
Police said two gunmen were involved in the apparent terror attack. One shooting was said to have occurred inside the Sarona compound while another was reported on the adjacent Ha'arba'ah Street.
Officials said one gunman was arrested and another was shot by security forces and taken into custody.
Some unconfirmed reports spoke of a third gunman who escaped, but police and soldiers deployed in the surrounding streets called off the search after an hour.
Chico Edri, the head of Israel Police's Tel Aviv district, told reporters the incident was over and no other suspects were thought to be at large. He said one gunman had been arrested, the other shot and then taken into custody. Edri said the police had seized the weapons used in the attack.
Police said there had been no warning of an imminent attack.
Less than an hour after the gunfire was first reported, the Ichilov Hospital confirmed that three victims had succumbed to their injuries. They were not immediately identified.
Of the wounded, one person was reported to be in critical condition, and four others in serious condition.
An eyewitness told Israel Radio that the gunmen were dressed up as ultra-Orthodox men. Other reports said they were dressed in semi-formal attire: black pants, white shirts and ties. Police wouldn't address the claims. Several reports said the two gunmen were sitting at Sarona's Max Brenner restaurant before beginning their shooting spree.
Prime Minister Benjamin Netanyahu, who landed in Tel Aviv around 10 p.m. following a two-day Moscow trip, was being briefed on the attack and was set to go directly to the Tel Aviv army headquarters, which is across from the Sarona Market. The head of Military Intelligence Maj. Gen. Herzi Halevy, Police Commissioner Roni Alsheich, and Public Security Minister Gilad Erdan were at the scene.
Yechiel Miller, a volunteer medic with United Hatzalah, related from the scene of the attack: "When I arrived at the scene I saw a woman who was unconscious and not breathing and in critical condition. We began resuscitation efforts. We also treated numerous other individuals who suffered gun shot wounds and wounds from shrapnel."
Davidi Dahan, another medic with United Hatzalah, said: "When I arrived at the scene I saw two young people who were suffering from gunshot wounds outside of a restaurant at the Sarona center. We treated them as well as numerous other individuals who were suffering from shock.
"While we were treating them other volunteers form the ambucycle unit of United Hatzalah reported that they were treating an unconscious woman behind the Sarona center and that she was in critical condition. We are currently searching for and treating other people who are suffering from shock and who have fed to nearby streets due to the incident."
Tel Aviv Mayor Ron Huldai arrived at Ichilov Hospital, and sent condolences to the families of the victims.
"We in Tel Aviv have for years been a target of terrorism," he said. "No terrorism will defeat us."
Police were warning civilians to stay away from the scene of the attack.
In April, Israeli police moved to close down Sarona Market over fears that the commercial center was not sufficiently secure, but the site's management said it would stay open. The popular compound is home to Israel's largest indoor culinary market. Its 8,700 square meters (93,000 square feet) of market space hosts 91 shops of all varieties.
At the time, police asked the Tel Aviv Municipality to revoke Sarona's business license, arguing that lax security put the visiting public at risk.
Since October, 29 Israelis and four others have been killed and hundreds more injured in the spate of attacks, though the violence had dramatically waned of late.
Some 200 Palestinians have also been killed, some two-thirds of them while carrying out attacks and the rest in clashes with troops, Israeli officials say.