An Israeli policewoman was stabbed and killed in the attack, police said, with security forces shooting dead three Palestinian assailants.
She has been identified as 23-year-old Hadas Malka who was a Staff Seargent in the border police.
The three men were armed with knives and an automatic weapon and carried out near-simultaneous attacks at two locations.
Another Israeli police officer was lightly wounded in the attack, and two Palestinian bystanders were wounded in the shootout that followed the initial assault.
The killing was "a natural response to the crimes of the occupier", he said, echoing the language used by Hamas after other recent attacks in Israel.
However, a senior official from Hamas, the Islamic group that rules the Gaza Strip, and the People's Front for the Liberation of Palestine (PFLP) said the three attackers, who were all shot dead at the scene, were their own members.
For its part, the PFLP issued a statement taking pride in and praising the operation, saying that Baraa and Osama -two of the three who had staged the attack- belonged to its ranks. "The female officer was stabbed multiple times and in critical condition before being rushed to the hospital, where unfortunately, she died of her wounds a short while afterwards".
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"Let the Jews watch for the demise of their state at the hands of the soldiers of the Caliphate", the statement said.
The attacks occurred simultaneously in two areas near the Damascus gate of Jerusalem's walled old city.
All three men were from the village of Deir Abu Mashal, near the occupied West Bank city of Ramallah. "I am appalled that once again some find it appropriate to justify such attacks as 'heroic.' They are unacceptable and seek to drag everyone into a new cycle of violence", he said. Palestinians say the Israeli measures are aimed at paving the way for the Judaization of the city. Israel blames the violence on incitement by the Palestinian leadership.
On Saturday, police cracked down on West Bank Palestinians without permits in Jerusalem, locating and sending home about 350.
Israeli media reported that in one of the incidents, close to Damascus Gate, the attackers rushed at a group of border guards, with one brandishing a homemade submachine gun, which jammed.
Netanyahu also revoked 250,000 Ramadan permits for Palestinians from the West Bank to visit their relatives in Israel and Jerusalem, and "instructed the police to reinforce security arrangements and checking procedures in the plaza around Damascus Gate", the scene of the attack, he said on Sunday.
The attack was the latest bloodshed in a wave of Palestinian attacks on civilians and soldiers that began in 2015.
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