Three gunmen opened fire with automatic weapons on several vehicles near a Jewish settlement in the Israeli-occupied West Bank Thursday, wounding eight people in a "terror attack", police said.

The incident occurred near Maale Adumim settlement, east of Jerusalem, police said, adding the attackers had arrived in a vehicle.

Violence was already on the increase across the West Bank prior to the Gaza war which began in October, but has escalated since to levels unseen in nearly two decades.

"The three terrorists... got out of their vehicle and started shooting from automatic weapons at vehicles that were standing in a traffic jam on the road towards Jerusalem," police said in a statement.

"Two terrorists were neutralised on the spot. In the searches conducted at the scene, another terrorist was located who tried to escape and he was also neutralised."

Eight people with varying degrees of injuries were evacuated from the scene by medics, the police said.

Thursday's shooting comes after two people were shot dead on Friday at a bus stop in southern Israel near the town of Kiryat Malakhi.

The West Bank has seen frequent Palestinian attacks on Israelis and near-daily raids by the Israeli military that often turn deadly.

Israeli troops and settlers have killed at least 400 Palestinians in the West Bank since the Gaza war began, according to the Palestinian health ministry in Ramallah.

Israel captured the West Bank -- including east Jerusalem, which it later annexed -- in the Arab-Israeli war of 1967.

Around 475,000 Jewish settlers currently live in the occupied West Bank, their settlements considered illegal by the United Nations and most of the international community.

The Palestinian population of the West Bank numbers about 2.9 million.

The Palestinians claim the territory as the heartland of their future independent state, but on Wednesday Israel's parliament overwhelmingly backed a proposal by Prime Minister Benjamin Netanyahu opposing any unilateral recognition of a Palestinian state.

The war in Gaza erupted after Hamas militants attacked Israel on October 7, resulting in the deaths of around 1,160 people in Israel, mostly civilians, according to an AFP tally based on official Israeli figures.

At least 29,313 people, mostly women and children, have been killed in Israel's retaliatory military offensive on Gaza, according to the health ministry in the Hamas-run territory.