A car has slammed into a crowd in central Jerusalem, injuring 19 people, nearly all of them Israeli soldiers, in what police have described as a “terrorist” attack.

Israeli police are calling the incident a ‘terrorist’ attack

An Israeli soldier and then a policeman fired at the Arab driver, killing him, a police spokesman said.

The driver was still lying in the road an hour after being shot.

The incident came just three hours after Foreign Minister Tzipi Livni was handed the daunting task of forming a new

government.

It also revived memories of two previous attacks by Palestinians in vehicles in the city in the past few months.

Police spokesman Micky Rosenfeld said a number of soldiers had been standing on a pavement and were struck by the car as it careered into them – deliberately according to witnesses.

“A man in a vehicle struck a number of people in Kikar Tzahal,” Mr Rosenfeld said.

“We can confirm it was a terror attack. The man was shot and killed.”

Jerusalem police chief Aharon Franco said almost all the injured were soldiers. Two were seriously hurt, medics said.

The black car, its windows shattered, halted when it slammed into a Roman Catholic religious building opposite the walls of Jerusalem’s Old City on a road that marks the dividing line between Arab East Jerusalem and the Jewish west.

The attack bore similarities to two previous incidents in Jerusalem this summer when Palestinians driving construction vehicles attacked Israelis.

In July, a digger driver killed three people and wounded dozens, while more than a dozen people were wounded in a similar incident three weeks later.