Israel began setting up checkpoints in Palestinian areas of occupied East Jerusalem on Wednesday as it struggled to stop a wave of Palestinian protests that have raised fears of a full-scale uprising.

A police spokeswoman said checkpoints were being set up at "the exits of Palestinian villages and neighbourhoods in East Jerusalem," where most of the recent Palestinian attackers have come from.

A wave of stabbing attacks by Palestinians against Israelis have spread fear in Israel, while a gun-and-knife attack on a Jerusalem bus on Tuesday killed two people.

A third Israeli was killed on Tuesday when a Palestinian attacker rammed his car into pedestrians before exiting with a knife.

All three attackers in the two incidents were from East Jerusalem.

Meanwhile, Palestinians in Bethlehem, Beit Gala, Beit Sahour and other villages in the occupied West Bank declared a general strike on Wednesday in mourning for Motaz Zwahra, 27, a Palestinian man killed by Israeli soldiers on Tuesday when they opened fire on a protest. Zwahra will be buried on Tuesday afternoon.

According to reports by Russia Today, Wednesday morning also saw the deaths of a Palestinian and an Israeli after a Palestinian man opened fire on a bus carrying Israelis in Jabel Mukaber in East Jerusalem.

On Tuesday, 20,000 Palestinian Arabs in the Arab city of Sakhnin in northern Israel took part in a general strike to support the Palestinians in the occupied territories. It was the largest demonstration of its kind in the last month since Palestinians began protesting the storming of Al-Aqsa Mosque by Israeli police and settlers.

Recent crackdown by the Israeli security forces against Palestinians has left more than 27 Palestinians dead in the occupied territories, including teenagers, a pregnant mother and her daughter.

Israeli forces have been using both live and rubber-coated steel bullets against demonstrators and at check-points in the occupied West Bank and Gaza Strip since 1 October, the Palestinian Health Ministry said in a statement on Friday.

Palestinians have been protesting for weeks against Israel's attempts to build more settlements in East Jerusalem and force Arab residents out of a city that is meant to be the capital of any future Palestinian state.

The protestors are also reacting to repeated attacks by Israeli forces and illegal Jewish settlers on the Al-Aqsa Mosque, and the holy site being closed to worshippers on numerous occasions.

The move to install checkpoints followed an overnight decision by Prime Minister Benjamin Netanyahu's security cabinet to authorise police to seal-off parts of Jerusalem, restricting access, and to impose curfews.

Netanyahu has faced international pressure over the wave of attacks, as well as the Palestinian protests in the occupied West Bank and besieged Gaza Strip.

The upsurge in violence that began on October 1 has led some to warn of the risk of a third Palestinian intifada, or uprising.

Frustrated Palestinian youths have defied efforts to restore calm by Israel and Palestinian president Mahmud Abbas.

Israel occupied east Jerusalem in the 1967 Six-Day War and later annexed it in a move never recognised by the international community