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Israeli police say they have shot a Palestinian man from the West Bank who stabbed at least 10 people in an attack on a bus in central Tel Aviv, the BBC reported.

The incident occurred on Maariv bridge where the suspect attacked people both on and outside the bus, police said.

Police say they are treating the incident as a terrorist attack.

The perpetrator attempted to flee the scene following the attack, and was lightly wounded after being shot in the leg, a police spokeswoman said.

Three of the victims were in a serious condition, with four others in a moderate condition and three lightly wounded, according to the ambulance services.

Officers are patrolling the area to prevent further attacks, police spokesman Micky Rosenfeld said on his Twitter account.

The street around Maariv bridge has been closed.

Police officials said that the suspect was a 23-year-old illegal worker from Tulkarem, a town in the occupied West Bank.

"The terrorist stabbed the bus driver several times but the driver fought back until he [the suspect] fled on foot and was neutralised by a guard from the prisons' service," a police statement said.

Eyewitnesses said the driver fought back by using pepper spray on the attacker.