Tel Aviv, Israel - Two people were killed and two others wounded in a stabbing attack near Tel Aviv Sunday, Israeli medics said, with police reporting a Palestinian suspect was "neutralized" and later died in hospital.

The Magen David Adom emergency service said in a statement that the "terrorist attack" took place in several locations in Holon, a southern suburb of Israel's commercial hub of Tel Aviv.

It comes at a moment of heightened tension in Israel and the wider Middle East, nearly 10 months into the Israel's all-out assault on the Gaza Strip and increased violence in the West Bank.

The stabbing suspect, from the Israeli-occupied West Bank, was "neutralized" by a police officer who arrived at the scene, the force said in a statement without elaborating.

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Police officers who approached the attacker ordered him to drop his knife, but "he did not respond" and they shot him, Israel's acting police commissioner, Peretz Amar, told journalists.

"It is a policy that in any incident like this where we encounter a terrorist, the terrorist doesn't come out alive," he said.

The Shamir Medical Center said the assailant was pronounced dead shortly after being taken to the hospital near Holon in a critical condition.

A 66-year-old woman and a man aged around 80 were badly wounded and died from their injuries shortly after the attack, the Wolfson hospital in the city said.

Israeli news website Ynet said the pair, whose ages Magen David Adom earlier gave as 70, were married.

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Two other men were wounded, the emergency service said.

A 68-year-old was in serious condition, and a 26-year-old was moderately wounded.

"This was a complex and difficult terrorist attack, with the victims located in three different places, around [500 yards] from each other," Magen David Adom said.

Regional tensions have soared as Iran and groups around the Middle East threatened retaliation for the assassination of Hamas political chief Ismail Haniyeh in Tehran on Wednesday, which they blame on Israel, and an Israeli strike in Beirut hours earlier that killed top Hezbollah commander Fuad Shukr.

Israel's National Security Minister Itamar Ben-Gvir told journalists at the scene of Sunday's attack: "Our war is not only against Iran, but also here in the streets."

"This is why we have armed the Israeli population with more than 150,000 gun permits," said the far-right politician who has loosened gun laws and repeatedly called on ordinary Israelis to carry arms.

One day before the Tel Aviv attack, Israeli forces launched two deadly strikes in the West Bank.

According to the press agency Wafa, an Israeli military drone targeted a vehicle "with two missiles" which caught fire, killing five men.

The director of the Thabet Thabet Hospital in Tulkarem said in a statement that "five martyrs" had arrived at the facility after "an Israeli drone strike on a Palestinian vehicle close to the village of Zeita in Tulkarem."

In a second air strike, hours later in the Tulkarem area, Wafa reported that four Palestinians were killed.

At least 603 Palestinians have been killed by Israeli troops and settlers in the West Bank since October 7, according to an AFP tally based on Palestinian health ministry figures.

At least 17 Israelis, including soldiers, have been killed by Palestinian attacks in the West Bank over the same period, according to official Israeli figures.

Excluding East Jerusalem, some 490,000 Israeli settlers now live in the West Bank alongside some three million Palestinians, with the Israeli government moving to expand settlements.

Last month, the International Court of Justice ruled that Israel's decades-long occupation of the Palestinian territories is illegal and needs to end "as rapidly as possible."

Meanwhile, Israel has killed at least 39,583 Palestinians in the besieged Gaza Strip in that same time period, according to the territory's health ministry, although many fear the death toll to be far higher.