An anti-gay ultra-Orthodox extremist suspected of stabbing revellers at Jerusalem's Gay Pride Parade is to be kept in custody after appearing in court on Friday.

The suspected attacker, Yishai Schlissel, was arrested at the pride parade the previous day after he brandished a knife and stabbed six people.

The court extended his arrest by 12 days as the investigation against him continues, police spokeswoman Luba Samri said.

Schlissel was convicted of a similar attack that wounded several people at a gay pride parade in Jerusalem in 2005. He had been released from prison just three weeks ago after serving his sentence.

Israeli hospital officials said that a 16-year-old girl remained in critical condition after the attack, with wounds to her chest and shoulder.

Three others are in hospital but their conditions are not life-threatening while the remaining two have been discharged, hospital officials said.

The gay pride parade was proceeding as planned with party music, Israeli flags and rainbow-clad marchers wending their way through central Jerusalem's barricaded streets, under a heavy police presence, when the attacker entered the throng of people. Within seconds he raised a knife and began stabbing people in the back.

Police pounced on him and arrested him. The crowd's carefree cheers suddenly gave way to screams.