A Palestinian was shot dead after stabbing two Israelis, one of them a soldier, near a flashpoint area of east Jerusalem that has been the focus of Palestinian protests.

The attack came in the tense aftermath of the 11-day conflict between Israel and Gaza's militant Hamas rulers which has left more than 250 people dead.

The stabbing took place near the Sheik Jarrah neighborhood in east Jerusalem, where dozens of Palestinian families face the threat of eviction by Jewish settlers, one of the underlying triggers of the recent violence.

Israeli police did not provide any details about the attacker but referred to him as a "terrorist," a term usually reserved for Palestinian assailants.

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