An off-duty Israeli female soldier and a Palestinian bystander were killed in the attack and 13 others were wounded, including a US diplomat, who was hit by grenade fragments.
Police and private citizens with handguns returned fire. The two assailants, one of whom was an Egyptian wearing red bandanas and carrying an AK-47 rifle, fell dead in Yoel Solomon Street shortly before midnight.
The US Secretary of State, Warren Christopher, called on the chairman of the Palestine Liberation Orgaisation, Yasser Arafat, to reaffirm his commitment to the peace process by strongly denouncing the attack and acting 'as firmly as he can against that kind of incident.
'I think Chairman Arafat should respond and condemn it strongly,' Mr Christopher said. 'That is part of his commitment.' Faisal Husseini, the PLO's spokesman on Jerusalem affairs, condemned the killings on Israel Radio. He said that the PLO was against the 'killing of civilians, whether Israelis or Palestinians.'
The Israeli Prime Minister, Yitzhak Rabin, said 'we will fight Hamas with all our might and will not let them harm the peace process.' He called for an expansion of PLO authority in the West Bank as a way to stop attacks, and contended the PLO was doing all it could to prevent violence. 'We cannot have full security when we do not have full control,' he said.
In a leaflet, Hamas said the attack came in revenge for the 8 October 1990 shooting of 17 Palestinians by Israeli police outside Jerusalem's Al Aqsa mosque during clashes.
'Our bold military operations will not cease as long as there is an Israeli soldier left on our occupied land,' the Hamas leaflet said. It identified the assailants as Hassan Abbas from the Gaza Strip and Issam Muhana Ismail Jawhari from Egypt.
Israel radio said Jawhari was a PLO policeman who arrived from Egypt recently. PLO police denied Jawhari was a policeman and Hamas officials said Jawhari, 24, was an Egyptian national who came to Gaza on a tourist visa in July and frequented the Sheik Radwan mosque, a center of Islamic militants.
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