A Palestinian gunman have opened fire in a Jewish religious school in Jerusalem, killing at least eight people and wounding 20.

The gunman was also killed in the assault at the Merkaz Harav seminary, in the Kyriat Moshe neighbourhood.

Ambulances raced to the area and police held back worried parents searching for children who had been attending a study session marking the start of Adar, the most festive month of the Jewish calendar.

Witnesses said the gunman entered the crowded compound of the seminary and fired automatic weapons at students.

'We have counted eight dead and 35 wounded,' an official of the service, equivalent to the Red Cross, told army radio.

Hezbollah's Al-Manar television announced that the perpetrator was a member of the 'Phalange of Free Men of Galilee - Groups of the Martyr Imad Mughnieh and Martyrs of Gaza.'

The claim was made in a tag line running across the bottom of  the screen, and no further details were immediately given.

France has strongly condemned the attack on as an 'attack against peace'.

Foreign Minister Bernard Kouchner said: 'France condemns in the strongest terms the horrible attack this  evening in a Talmudic school in west Jerusalem which has caused the  death of numerous civilians.'

In the Gaza Strip, gunmen fired in the air to celebrate the attack, three days after Israel ended a military offensive in the Hamas-run territory that killed more than 120 Palestinians, about half of whom were identified as civilians.