Tel Aviv - Israeli police said Friday they had shot dead a Palestinian gunman who had allegedly killed two people and wounded several others in Tel Aviv sparking an overnight manhunt, the latest in a surge of violence. “We succeeded this morning... in eliminating the terrorist by exchange of fire,” police commissioner Yaakov Shabtai said in a statement.

The attacker had shot at revellers at a bar on the busy Dizengoff Street in the coastal city of Tel Aviv just after 9:00pm (1800 GMT) Thursday, triggering chaos as people fled in panic.