A Palestinian rammed a bulldozer into Israeli buses, cars and pedestrians on one of Jerusalem's busiest streets on Wednesday, killing three people and wounding more than 40, emergency services said.

Police said the driver of the 20-tonne earthmoving vehicle was shot dead by a civilian and a policeman who climbed onto its cab as it careered for 500 metres (yards) along Jaffa Road.

There was no immediate claim of responsibility from militant groups and police said they were trying to establish if the dead man, a 30-year-old from Arab East Jerusalem, acted alone.

"It was definitely a terrorist attack," cabinet minister Roni Bar-On said.

Both Hamas and Islamic Jihad described the attack as a "natural" response by Palestinians to Israeli aggression but, nearly two weeks into a truce in the Gaza Strip, neither Islamist group laid claim to organising the Jerusalem violence.

Television footage showed bystanders pursuing the yellow roadworking vehicle as it ploughed through traffic. Some men in civilian clothes had climbed aboard and one fired a pistol into the cab as others wrestled inside.

After the struggle, a helmeted policeman in body armour fired his automatic rifle into the slumped figure in the cab. The officer later told reporters that he had fired twice, fearing the wounded man still posed a danger to the public.

"A bulldozer driven by an Arab went on a rampage on Jaffa Road, hitting pedestrians, buses and cars," police spokesman Shmuel Ben-Ruby said.

Witness Moshe Oren said at the scene: "The only way to stop him was with a bullet to the head. We saw a civilian climb onto the bulldozer and shoot the man. We were relieved."

Israel's main ambulance service said more than 40 people were taken to hospital. Two hours after the incident, rescue workers said they had pulled the body of a woman from a car that they had found crushed beneath the bulldozer.

It was the first Arab attack in Jewish west Jerusalem since a gunman killed eight students on March 6 at a Jewish religious school a few hundred metres (yards) from the scene of Wednesday's bloodshed.

After the midday (0900 GMT) attack, emergency vehicles rushed to Jaffa Road, scene of several suicide bombings on buses in the past decade or so. Part of the street is dug up as part of a major project to build a tramway through the city.

Among the vehicles damaged was a van with its entire front crushed and a No. 13 bus, flipped on its side and gashed by the shovel of the bulldozer. Blood smeared the bus's shattered windscreen and trailed along the street.

A Reuters reporter saw two bodies at the scene.

BULLET TO THE HEAD

The scene in the aftermath of the incident was reminiscent of numerous suicide bombings that destroyed buses on Jaffa Road during a wave of attacks in 1996 and during the first years of a Palestinian uprising that began in 2000.

Since then, fatal attacks on Israelis have become relatively rare, despite frequent rocket and mortar fire from Gaza. Israeli forces have killed more than 360 Palestinians this year, mostly in Gaza. More than 100 of the Palestinian dead were civilians.

The incident came nearly two weeks into a shaky ceasefire in the Gaza Strip between Israel and Hamas.

"We do not expect it will influence the Gaza calm," Hamas spokesman Sami Abu Zuhri said in Gaza.

"There is a continued aggression against our people in the West Bank and Jerusalem and so it is natural that our people there will respond to such aggression," he said, in apparent reference to Israeli raids against militants.

Hamas's allies, Islamic Jihad, said in a statement: "The Jerusalem Brigades bless the heroic operation in Jerusalem as the natural reaction to the crimes of the occupation."

Unlike Palestinians in Gaza and in the occupied West Bank, those living in Arab East Jerusalem, which was also captured by Israel in the 1967 Middle East war, have free access to the Jewish west of the city and to Israel.

Arab and Jewish populations do not mix extensively, but Palestinian workers are a familiar sight on construction and highway projects in Israel.

The gunman who attacked the seminary in March was from East Jerusalem. That attack was claimed by Hamas officials.

At Gaza's border crossing with Egypt, Egyptian forces used water cannon and Hamas security forces had to restrain a crowd jostling for access during a brief opening of the Rafah crossing point between the Palestinian enclave and its Arab neighbour.

Some Palestinians threw stones at Egyptian forces and also complained of Hamas's failure to speed their passage to Egypt, the only access to the outside world for most Gazans, who are blocked from other land, sea and air routes by Israel.

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