Three people have been killed and others wounded in what police say is a suspected terror attack in the central Israeli city of Elad.

Israeli media reported that two attackers, armed with knives, axes, or both, targeted passers-by in a park.

A manhunt is under way, with police setting up roadblocks and searching vehicles.

The attack came on Israel's Independence Day, a public holiday marking the country's founding.

A volunteer medic said the "incident will be deeply etched in my heart".

Moti Tsinvert told The Jerusalem Post the victims were people "who went out just to breathe fresh air in the park, and their lives were ended so harshly".

Local authorities in Elad have ordered residents to stay indoors.

Most of the city's population are members of Israel's ultra-Orthodox Jewish community.

"The joy of Independence Day was cut short in an instant. A murderous attack in Elad that shocks the heart and soul," said Israeli Foreign Minister Yair Lapid, posting on Twitter.

US Secretary of State Antony Blinken said at a press briefing on Thursday that the US "vehemently condemns" the "horrific attack targeting innocent men and women".

The incident follows a spate of deadly attacks carried out by Palestinians and Israeli Arabs in recent weeks, the deadliest period of attacks in Israel since 2006.

Seventeen Israelis, including an Israeli Arab policeman, and two Ukrainians have been killed in the attacks in Israel and the West Bank in the latest flare-up.

Israel has responded by raiding Palestinian towns, sparking clashes that left at least 26 people dead, including bystanders.

There has also been Israeli-Palestinian violence at a flashpoint holy site in Jerusalem revered by Muslims as the al-Aqsa mosque compound and by Jews as the Temple Mount.

Israel holds memorial ceremonies each year before Independence Day, marking its wartime losses and victims of deadly attacks.

The Jewish state was founded on 14 May 1948, and anniversaries are calculated in accordance with the Hebrew calendar.

On 15 May, Palestinians mark the creation of Israel with a day of mourning called al-Naqba, Arabic for "catastrophe".