Israeli rescuers place a body on a gurney at the site of a shooting in Jerusalem on Thursday. AFP

Two attackers opened fire at a bus stop during morning rush hour at the entrance to occupied Jerusalem on Thursday, killing at least two people and wounding eight others, Israeli police said.

"Two men arrived at the scene in a vehicle armed with firearms, these attackers opened fire towards civilians at the bus station and were subsequently neutralised by security forces and a nearby civilian," Israeli police said.

The attackers came from East Jerusalem, Jerusalem Police District Commander Doron Turgeman told reporters at the scene.

A large number of ambulances and police converged on the street that was crowded with morning commuters, and police said they were searching the area to make sure there were no other attackers.

Israeli officials stand next to the body of a person at the scene of a violent incident in Jerusalem on Sunday. Reuters

"Abhorrent terrorist attack in Jerusalem this morning. We unequivocally condemn such brutal violence," said Ambassador Jack Lew.

The violence came as Israel and Hamas struck a last-minute agreement on Thursday to extend their six-day ceasefire in Gaza by one more day to allow negotiators to keep working on deals to swap hostages held in the coastal enclave for Palestinian prisoners.

Reuters