Two people have been wounded in a stabbing attack at a hotel in Israel, with police reporting that the Palestinian assailant has been arrested.

The attacker was a hotel employee and screamed ‘Allahu akbar’ as he slashed at guests in the dining room, local media reports.

Israeli paramedics said they were evacuating two men, aged approximately 50 and 25, to the hospital.

They said both had been stabbed in their torsos and the older man was in a critical condition. Israeli police confirmed the attacker was arrested.

The nightmare unfolded at a hotel in Tzuba, an Israeli kibbutz less than 10 kilometres west of Jerusalem.

The attacker was subdued by an off-duty police officer who happened to be at the hotel with family during the incident, according to police reports.

Other hotel guests then helped restrain the attacker until police arrived.

The terrorist is a 42-year-old resident of Shuafat refugee camp who has a criminal past, according to local media. 

In a terrifying attack at a hotel in Israel, an employee shouting ‘Allahu akbar’ stabbed two guests. Emergency services quickly responded to the scene.

A 60-year-old Israeli suffered serious injuries in the attack, which took place in the dining area of Kibbutz Tzuba in the Jerusalem Hills on Friday. Police were on the scene following the incident.

He had previously been convicted of stone-throwing offenses.

The attacker was an outside contractor hired to wash dishes at the hotel.

According to the police, an off-duty officer from the Southern District was staying at the hotel and restrained the terrorist.

He told local media: ‘I was at a family event at the hotel when I noticed a crowd rushing out. I immediately realized something unusual was happening, so I shouted for people to stay calm and walk instead of running. 

‘I drew my gun, grabbed identification for myself, and ran toward the direction the crowd had fled from.

‘To minimize the risk to remaining civilians, I subdued the terrorist using only physical force, not gunfire. With the help of some others, we managed to pin him to the ground and put him in handcuffs.’

He added: ‘I noticed a person had been stabbed in the upper body and gave him first aid. It was then I saw that my cousin had also been stabbed.’ 

Eyewitnesses reported hearing the attacker shouting ‘Allahu akbar’ before he started to slash at the two victims.

A hotel guest told Arutz Sheva: ‘We were sitting to eat, there was suddenly a commotion, we didn’t understand what was happening. 

‘We saw someone holding a knife about to enter the balcony where we were, and an Arab employee, the dining room manager, caught him and saved us.’

Israeli police said an individual ‘from the Shuafat area carried out a stabbing attack against guests at a hotel in Kibbutz Tzuba, injuring them’.

The Shuafat neighbourhood and nearby refugee camp are in east Jerusalem, which has been occupied by Israel since 1967.

An officer at the scene ‘subdued the terrorist, placing him under arrest,’ the police added.

The stabbing comes days after a shooting by two Palestinians from the Israeli-occupied West Bank that killed six people in Jerusalem.

The militant Hamas group, which runs Gaza, claimed responsibility for the attacks.

The Israel-Hamas war in Gaza has killed tens of thousands of Palestinians and sparked a surge of violence in Israel and the occupied West Bank.

This is a breaking news story, more to follow.