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A Palestinian was shot dead after he opened fire early on Tuesday at the entrance to an illegal Israeli settlement outside Jerusalem, killing three Israeli men and critically wounding a fourth, Israeli police and medical services said.

This is being branded as one of the deadliest attacks in a two-year spate of violence.

Police spokeswoman Luba Samri said the attacker was a 37-year-old Palestinian who approached the back gate entrance of the Har Adar settlement, hiding among fellow Palestinian day labourers who were being checked by security forces.

She said he aroused their suspicions and was asked to stop. At that point, he pulled out a weapon and began opening fire from a short distance.

The attacker, who held a valid permit to work in Israel, was then shot dead by other forces at the scene.

The Magen David Adom medical service said that in addition to the three men in their 20s and 30s who were killed, a fourth Israeli man, 32, was evacuated to hospital in critical condition.

Har Adar is an upscale community west of Jerusalem, straddling the seam line between the occupied West Bank and Israel proper — and an unusual target in the wave of violence that Israel has been coping with over the past two years.

Shay Retter, the head of Har Adar’s security committee, said that between 100 and 150 Palestinian labourers typically enter the community each day for work.