One Jordanian was killed and two people, a Jordanian and an Israeli, were wounded in a shooting incident in a building inside the Israeli embassy complex in Jordan's capital Amman, police have said.
The two Jordanians, working for a furniture firm, had entered the embassy compound before the shooting, the police said in a statement.
They added that the dead man was killed by a gunshot and the two wounded men had been rushed to hospital.
Israel has imposed a ban on reporting the incident and has made no public comment.
Violence against Israelis is rare in Jordan, a tightly policed country that is also a staunch regional ally of the United States.
But tensions have escalated between the two countries since Israel installed metal detectors at entry points to Al-Aqsa mosque in Jerusalem after two Israeli policemen were shot dead by three Arab-Israeli gunmen on Friday near the site.
The new security measures have triggered the bloodiest spate of Isreli-Palestinian violence for years. Jordan has called for the removal of the metal detectors and thousands of Jordanians have protested against the Israeli move.
In their statement, the Jordanian police said that after the attack they had sealed the heavily protected embassy in an affluent part of the capital and deployed dozens of anti-terrorism forces.
Initial checks suggested the two Jordanian men had entered the embassy compound as workmen, they said.
Many of Jordan's 7 million citizens are of Palestinian origin. They or their parents or grandparents were expelled or fled to Jordan in the fighting that accompanied the creation of Israel in 1948.
Israel has in the past given repeated assurances that it understands Jordan's concerns and does not seek to alter the status quo in the Muslim holy sites of Jerusalem.