A gunman left eight Israelis injured in Jerusalem in a shooting near one of the country's holiest sites.
Two people, including a pregnant woman, are in a critical condition after the man -- believed to be Palestinian -- opened fire on a bus near the Western Wall.
The attack comes amid renewed violence between Israel and Palestinians living in Gaza and the West Bank, which killed scores of Palestinians.
American citizens were among the wounded, a US Embassy spokesperson said without providing more details.
Israeli police announced on Sunday morning that they had arrested a man after cordoning off the area and searching for the suspect, who fled the scene.
"The terrorist is in our hands," said police spokesman Eli Levy on public radio, without disclosing further information on his identity.
The shooting happened as a bus "full of passengers" waited in a parking lot near the Western Wall, the holiest site where Jews can pray.
Bus driver Daniel Kanivesky said: "The bus was full of passengers. I stopped at the [bus] station of the Tomb of David and at this moment the shooting started."
"I saw two people falling outside and two inside [the bus] bleeding."
Footage from the scene shows the bus peppered with bullet holes as police now set about investigating the incident.
Last weekend, Israel's military unleashed an offensive in the Gaza Strip targeting the militant group Islamic Jihad, setting off three days of fierce cross-border fighting.
Forty-nine Palestinians, including 17 children and 14 militants, were killed, and several hundred were injured in the fighting.
Islamic Jihad fired hundreds of rockets during the flare-up to avenge the airstrikes, which killed two of its commanders and other militants.
Israel said its offensive was designed to thwart threats from the militant group.
Magen David Adom, Israel's equivalent of the Red Cross, said it rushed to the scene following reports of the shooting.
Two women and six men were injured in the attack, two of whom seriously, said spokesman Zaki Heller, adding that all were "conscious."
Shaarei Tsedek Hospital in Jerusalem told AFP that medical teams had to perform a caesarean section on a pregnant woman injured in the attack.
"She remains intubated and in serious condition. The infant was born and is in stable condition," he said.
The attack was strongly condemned by Israel's government.
"Anyone who wants to harm us should know that they will pay the price for any harm to our civilians," Israeli Prime Minister Yair Lapid said in a statement on Sunday.
The Palestinian Islamist movement Hamas which controls the Gaza Strip hailed a "heroic operation" without claiming responsibility.
"Our people will continue to resist and fight the occupier with all means," Hamas said in a statement.