Police said the incident, which took place on Israeli Independence Day, involved two suspected attackers. One fired a rifle while the other attacked people with an axe or a knife, police said.
The suspects have still not been apprehended, according to Israeli police, who urged the public to stay away from the scene.
“At this point, security crossings have been deployed on various roads, together with a helicopter, searching for a vehicle that was seen fleeing the scene,” a police spokesperson said.
Pictures from the scene showed multiple emergency vehicles including ambulances and motorcycles.
Two of the wounded have arrived at Beilinson hospital, the hospital said. One is in critical condition and one in serious condition, it said.
“This is a very difficult event. When we arrived at the place we noticed that it was a complex scene,” Alon Rizkan, a paramedic from Israel’s emergency response service Magen David Adom (MDA) said in a statement.
All three of the dead were men in their 40s, Rizkan said.
Two men, aged 60 and 35, are seriously injured, Rizkan said. A 40-year-old man was moderately injured and a 23-year-old man was lightly injured fighting the attackers, he added.
The attack marks the latest in a series of violent incidents that have put Israel and the Palestinian territories on edge in recent weeks. Last month, two people were killed and more than a dozen others were wounded in a shooting at a bar in a busy area of Tel Aviv.
In total, 18 people have been killed in attacks since March 22, according to CNN’s calculations.
US State Department spokesperson Ned Price said that Thursday’s suspected terror attack appears to be “the latest in a what has been a string of despicable terrorist attacks that have rocked Israel in recent weeks.”
“We saw them in advance of this holy period — the confluence of Easter, of Passover, of Ramadan. We saw them in advance of the Negev Summit. And if this is what it appears to be, it is something that we would condemn in strongest terms,” Price said.
“Our commitment to our Israeli partners, to Israel’s security, that is ironclad, and we’ll provide any and all assistance that may be required in this case,” he added.
CNN’s Jennifer Hansler and Jorge Engels contributed reporting.