Israeli police are seeking a masked man who opened fire at a gay youth club in Tel Aviv, killing two people.

The gunman used a pistol to target the group of young people at the entrance to the community centre in the heart of Israel's commercial capital late last night and then fled, police and witnesses said.

A teenage girl and a man in his 20s were killed and 15 people were wounded, three seriously, police said, adding that a manhunt has been launched for the assailant.

It was the worst attack against country's gay and lesbian community.

‘All indications point that this was a criminal incident and not a terror attack, which was most likely deliberately directed against the gay and lesbian community,’ a police spokesman said.

Thousands of people gathered in the centre of the Mediterranean seaside city overnight to protest against the attack, some waving rainbow banners and lighting candles for the victims.

They were identified as Liz Tarbishi, 17, and Nir Katz, 26.