Palestinian gunmen opened fire at a West Bank checkpoint late Sunday, killing one person and wounding four others, police said.
Police spokesman Micky Rosenfeld called the incident a "terrorist" attack. But Israel's Army Radio said the shooting had been linked to a criminal dispute.
Israel's rescue service said the victims were Palestinian residents of east Jerusalem. There were no further details, but Palestinian militants have in the past mistakenly attacked Arabs traveling in cars with Israeli license plates.
East Jerusalem Arabs carry Israeli identification cards and have Israeli plates on their cars.