Alleged stabber had entered Israel on a tourist visa, according to police, and attacked officer in East Jerusalem area.
A Jordanian man was shot dead by Israeli police in East Jerusalem after he allegedly stabbed an officer in the neck.
Eye witnesses told Al Jazeera that the incident took place at 1.30pm local time (1030 GMT) on Saturday near the Chain Gate which leads to Al Aqsa mosque.
Muhammad Abdellah Salim al-Qasaji, 57, who police said had entered Israel on a tourist visa a week ago, approached an officer before stabbing him, according to eye witnesses.
The police officer then shot the alleged attacker. Eye witnesses added that another officer shot the Jordanian man in the head while he was lying on the ground.
The attacker was dressed in a black suit, trying to disguise himself as an ultra orthodox Jewish man.
Following the incident, police ordered shop keepers to evacuate the area before making two arrests.
A Israeli police statement said the officer was taken to hospital with "moderate" injuries after the attack.
Saba Nidal Obaid, 20, was shot in the stomach near the village of Nabi Saleh, north of Ramallah, during a protest in support of the 1,500 Palestinians on hunger strike across Israeli prisons.
The Palestinian Authority, which exercises limited self-rule in the West Bank, denies incitement and says that in many cases Israel has used excessive force in thwarting attackers armed with rudimentary weapons.
A wave of unrest that broke out in October 2015 has claimed the lives of 264 Palestinians, 41 Israelis, two Americans, one Jordanian, an Eritrean, a Sudanese and a Briton, according to an AFP news agency count.
Most of the Palestinians killed were carrying out knife, gun or car-ramming attacks, the Israeli authorities say.
Others were shot dead during protests or clashes, while some were killed in Israeli air strikes on the Gaza Strip.
Since October 2015, a number of local and international human rights groups have raised concerns that Israeli security forces have used excessive force when confronting Palestinians who had carried out attacks or been suspected of doing so.
The Israeli police relaxed its open-fire regulations in December 2015, permitting officers to open fire with live ammunition on those throwing stones or firebombs as an initial option, without having to use non-lethal weapons first.