A Palestinian rammed a truck into a group of Israeli soldiers visiting a popular tourist spot in Jerusalem on Sunday, killing four and wounding at least 15 people, authorities said.

The driver was also killed at the location overlooking holy sites in the Old City such as the Dome of the Rock and providing one of the most spectacular views of Jerusalem.

Israeli Prime Minister Benjamin Netanyahu alleged the attacker "supported" the Islamic State group, though he provided no details on what led to the finding.

Chaos broke out at the scene when the truck ploughed through the crowd, with hundreds of soldiers having arrived there as part of a tour for troops about the history of Jerusalem.

Israel's military said one of its soldiers fired on the attacker and distributed video of him saying he shot after realising it was not an accident.

Multiple bullet holes could be seen in the windshield of the truck.

Police only confirmed four people were dead, but a medic at the scene said they were soldiers.

Medics also reported that three of the victims were women, while all four were in their 20s.

Video said to be of the incident being shared online shows a flatbed truck with a crane in the rear drive through a group of soldiers standing next to a bus.

The driver then pulls off to the side and tries to reverse back towards where the soldiers were hit before the truck eventually comes to a stop.