It happened in Bnei Brak, one of the country's most populous ultra-Orthodox Jewish areas.
The gunman was shot dead by police, a paramedic at the scene said.
Israel security forces were on high alert after attacks by Israeli Arabs last Tuesday and Sunday, which left six people dead.
Footage from the scene shows the gunman in dark clothing raising his automatic weapon and firing through the passenger window of a car at point-blank range.
One person was found dead in a vehicle and others on surrounding streets, the Jerusalem Post website says.
