US Secretary of State John Kerry has said talks with Israeli Prime Minister Benjamin Netanyahu have given him a "cautious measure of optimism" that tensions between Israelis and Palestinians could be defused.

"I would characterize that conversation (with Netanyahu) as one that gave me a cautious measure of optimism that there maybe ... a way to defuse the situation and begin to find a way forward," Mr Kerry said in Berlin.

"If parties want to try, and I believe they do, want to move to a de-escalation, there are a set of choices that are available," he added at a joint news conference with German Foreign Minister Frank-Walter Steinmeier.

Nine Israelis have been killed in Palestinian stabbings,shootings and vehicle attacks since the start of October, while 48 Palestinians, including 24 attackers have been killed by Israeli security forces in response. 

Earlier today, Israeli police said they shot dead a Palestinian and wounded another after the pair stabbed a Jewish student near Jerusalem.

Describing the morning attack in the town of Beit Shemesh, Israeli police said the two Palestinian assailants from the occupied West Bank stabbed the student at a bus stop.

He was taken to hospital, as was the surviving attacker.

Nine Israelis have been killed in Palestinian stabbings, shootings and vehicle attacks since the start of October.

During the unrest, 49 Palestinians, including 25 assailants, have been killed in attacks and during anti-Israeli protests.

Among the causes of the turmoil is Palestinians' anger at what they see as Jewish encroachment on the al-Aqsa mosque compound in Jerusalem's walled Old City.

The compound is Islam's holiest site outside Saudi Arabia and is also revered by Jews as the location of two ancient Jewish temples.

Mr Netanyahu has pledged to maintain a decades-old status quo at the compound that bans Jews from praying there and has denied Palestinian allegations that he intends to change the arrangement.

As Israeli security forces and civilians become ever more jittery, a Jewish seminary student mistaken for an attacker was shot dead by soldiers yesterday at a busy intersection in Jerusalem, police said.

An Eritrean migrant was shot by a security guard and beaten by an angry crowd of Israelis in the town of Beersheba on Sunday.

He died in hospital of his wounds, and four suspects alleged to have participated in the attack were due to appear in court today.

UN Secretary General Ban Ki-moon held talks with Palestinian President Mahmoud Abbas yesterday. But after two days of discussions in the region, there was no sign Mr Ban had made progress towards bringing both sides back from a "dangerous abyss".