An Israeli man injured in an attack in which a Palestinian rammed his car into pedestrians has died of his injuries.

His death takes the death toll in the incident to three, including the Palestinian man who was shot dead at the scene.

The militant Islamist group Hamas claimed responsibility for the attack on Wednesday at a light rail stop in Jerusalem.

A spokeswoman said a man of about 20 died at Hadassah Medical Centre in Jerusalem.

A 38-year-old Israeli border policeman, Jaddan Assad, was also killed in the attack by a Palestinian man from east Jerusalem.

Tension has risen steadily in Jerusalem since before a Gaza war that ended with a truce in late August.

A Palestinian youth was burned alive in early July by suspected Jewish attackers avenging the killing of three Israeli youngsters in the West Bank.

Nearly daily stone-throwing protests have erupted in east Jerusalem neighbourhoods and at a flashpoint holy site in Jerusalem housing the holiest place in Judaism and Islam's third-holiest site.

Israeli police deployed extra forces today to try to prevent further violence, also limiting access to worshippers by permitting only Muslim men older than 35 to enter the compound of the al-Aqsa mosque.

Palestinians have accused Israel of trying to change the delicate status quo at the site, citing visits by right-wing Israelis seeking prayer rights there.