Israeli forces launched a manhunt Friday for attackers who killed three people in the central city of Elad as the country marked the anniversary of its founding, in the latest incident of deadly violence.

The search -- backed by a large deployment of security personnel, helicopters, drones and roadblocks -- was seeking what police described as "one or two terrorists", who remained at large hours after the attack.

No details on the alleged assailants had emerged, but Defence Minister Benny Gantz announced measures to stop the attackers from "escaping and travelling" to the occupied West Bank, comments that pointed to possible Palestinian suspects.  

The Magen David Adom emergency response service, which confirmed the deaths, said four others were wounded after the incident, which follows a series of fatal attacks committed by Palestinians and Israeli Arabs in recent weeks.

"We will get our hands on the terrorists... and ensure they pay the price," Prime Minister Naftali Bennett said in a statement.

Israel's Foreign Minister Yair Lapid said "the joy of independence day had been interrupted in an instant", condemning the "murderous attack in Elad".

Gantz announced that a closure of the West Bank -- in place for the Israeli independence day -- would remain in force through Sunday. 

US Secretary of State Antony Blinken tweeted that the United States "vehemently condemn(s) the terrorist attack in Israel today".

"Our hearts are with the victims and the loved ones of those killed. May the memories of those who passed be a blessing," he added.

'Complex scene'

Prior to Thursday's incident, a string of attacks since March 22 had killed 15 people, including an Arab-Israeli police officer and two Ukrainians, in separate attacks inside Israel.

Two of the deadly attacks were carried out in the Tel Aviv area by Palestinians.

A total of 27 Palestinians and three Israeli Arabs have died during the same period, among them perpetrators of attacks and those killed by Israeli security forces in West Bank operations.

Specifics on how Thursday's violence unfolded remained unclear, but several Israeli media reports said the assailants carried knives, or an axe. Other reports suggested the attackers had used firearms.

MDA paramedic Alon Rizkan, a first responder, described it as a "complex scene", identifying all of the dead as men in their early 40s.

The majority of Elad's 50,000 residents are members of Israel's ultra-Orthodox Jewish community, known as haredim, hundreds of whom had gathered at the attack, wearing crisp white shirts amid a swarm of medical personnel and police.

Another majority haredi city, Bnei Brak, which also lies on the outskirts of the coastal city of Tel Aviv, was targeted in March.

Warnings of spiralling violence

For Palestinians, the anniversary of Israel's 1948 declaration of independence marks the Nakba, or "catastrophe", when more than 700,000 fled or were expelled during the war surrounding Israel's creation.

Palestinian president Mahmud Abbas condemned "the killing of Israeli civilians" in Elad, warning it could lead to spiralling violence.

But Hamas Islamists who control the Israeli-blockaded Gaza strip and Islamic Jihad, another Palestinian armed group, praised the Elad attack, calling it a consequence of unrest at Jerusalem's Al-Aqsa mosque compound. Neither group claimed responsibility.

"This operation demonstrates our people's anger at the occupation's attacks on holy sites," Hamas spokesman Hazem Qassem said of the Elad attack.

"The storming of the Al-Aqsa mosque cannot go unpunished."

Fresh clashes broke out earlier Thursday at Al-Aqsa, which is also the holiest site in Judaism, in which it is known as the Temple Mount.

The latest morning violence at the flashpoint site came following a tense April, in which nearly 300 people were injured in clashes between police and Palestinians at Al-Aqsa.