The attackers threw grenades and sprayed bullets

Israeli military sources said at least eight settlers were wounded, after a gunman sprayed bullets and threw grenades in the dining room of the Otniel settlement as the Jewish Sabbath was beginning.

A second attacker was killed after a gunfight later.

Later, in the early hours of Saturday morning, a car exploded in central Jerusalem.

No-one was injured except the person police suspect carried out the attack, Reuters news agency reported.

End of calm

The militant group Islamic Jihad said it had carried out the attack on the Jewish settlement.

The group's leader Ramadan Abdullah al-Shallah told the Arabic television channel Al-Jazeera that it was in revenge for the death of a number of Palestinians killed by Israeli soldiers on Thursday.

The car bomb went off near an Israeli police station, close to an area with several bars, the Associated Press news agency reported.

The bomb and gun attack, mark the end of a month in which comparatively few Israelis have been killed in such incidents.

They also come one day after Israeli troops shot killed at least seven Palestinians in a number of operations across the West Bank.

Five of those killed on Thursday were suspected Palestinian militants, while two were unarmed bystanders.

The dead included Hamza Abu Roub, a local leader of Islamic Jihad.

There were calls for revenge during the funerals of those killed on Thursday and during demonstrations organised by the militant Islamic group Hamas on Friday morning.