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At least four soldiers were killed as a truck rammed into a group of soldiers on a promenade in the Armon Hanatziv neighborhood of East Jerusalem.
The Times of Israel quoted Police chief Roni Alsheich as calling the incident a vehicular terror attack.
The incident happened when the soldiers were getting off a bus at the promenade.
Police said the driver of the truck accelerated as he rammed into the group.
Prime Minister Benjamin Netanyahu was quoted as saying by news agencies that the attacker was an Islamic State 'supporter'.
According to the Magen David Adom rescue service, the four soldiers who died were in their 20s and included three women and one man.
At least 15 people were injured in the incident.
Israeli Police confirmed that the driver of the truck had been neutralised and his identity is being investigated.
IMAGE: Israeli security forces work at the scene of a truck ramming incident in Jerusalem on Sunday. Photograph: Ronen Zvulun/Reuters