A bulldozer went on a rampage in Jewish west Jerusalem on Tuesday, in the second such attack this month, and rammed into cars before the bulldozer's driver was shot dead, police said.

The attack occurred just down the street from the hotel where U.S. Democratic presidential hopeful Barack Obama is due to stay during a visit to Israel scheduled for Wednesday.

"The bulldozer driver left a construction site, and hit two cars," a police spokesman said.

"A civilian who saw what was happening, shot him. The bulldozer continued on its way. A border police patrol ... continued to shoot and the terrorist was killed," the spokesman said. "Another person was wounded."

A similar attack in Jerusalem killed three Israelis three weeks ago. The Palestinian driver of the bulldozer involved in the July 2 incident was shot dead by an off-duty soldier and police.

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