Six people were killed in a knife and shooting attack on Tuesday evening in Jaffa in south Tel Aviv, police in Israel said.
Nine persons were injured and two gunmen were "neutralised" by members of the public.
Unofficial accounts, as details continue to filter in, put the death toll at eight.
The suspected terror attack, according to police officials, began in a train and continued outside.
Earlier Israel's ambulance service said a report was received in the evening of people being injured by gunfire.
Gunshots were heard in Jerusalem Street, next to a light rail train station, agencies said.
CCTV images showed two men, one with a machine gun, emerging from a train.
The suspected terrorists appeared to have exited the light rail station.
Loud gunfire could be heard in videos surfacing online, which showed a number of people lying unmoving on the ground.
The identities of the deceased gunmen have been withheld.
An Iranian missile attack on Israel began shortly after the attack.