Jerusalem  - A Palestinian stabbed to death an elderly Israeli passerby Thursday in the Jewish settlement of Gilo, south of Jerusalem, Israel Radio reported.

The Palestinian was stopped by two police officers and asked to identify himself, but he drew a knife and stabbed one of the officers.

The officer then shot the stabber, but he escaped and while running away fatally stabbed a second Israeli, a civilian in his 80s, whom he ran into, a witness who chased after the attacker and overpowered him said.

The stabber, shot in the stomach, was in moderate condition, as was the police officer, who was stabbed in the back. The passerby died of his wounds in hospital.

Gilo, a suburb south of Jerusalem on the road to Bethlehem, is located within the city's municipal boundaries and considered a Jewish neighbourhood of the disputed city by Israel.

Built on occupied West Bank land, it is regarded as a Jewish settlement by Palestinians and the international community.

Israel wants to keep its main Jewish settlement blocks in and around Jerusalem as part of a future peace deal with the Palestinians. (dpa)