A US national opened fire at a hotel in the southern Israeli resort town of Eilat on Friday, killing a hotel employee over a work dispute, before being shot dead by security forces, police said.
The shooting, which police said was a purely criminal incident, took place at the five-star Leonardo Club hotel as the beach resort was packed with tourists and Israelis enjoying the week-long Jewish holiday of Sukkot.
Police named the gunman as William Hershkovitz from New York, who was born in 1989, saying he had worked as a trainee sous-chef at the hotel and recently been dismissed.
"The man was a trainee sous-chef in the kitchen who had an argument with the person in charge of him after being fired," police spokeswoman Luba Samri told AFP, without saying when he was dismissed.
"He grabbed a gun from a security guard and used it against the person who had been supervising him, killing him," she said.
She identified the victim as Armando al-Abed, a 33-year-old Arab Israeli from a Christian village in the northern Galilee region.
The gunman then barricaded himself into the kitchen where he was surrounded by police special forces who tried to talk him down, she said.
"The shooter barricaded himself into the kitchen and was surrounded by police forces, including special units, who asked him to turn himself in," Samri said.
"He opened fire during the negotiations with police. They fired back and killed him."
Two other tourists were taken to hospital suffering from shock, Samri added.
The identity of the shooter was not immediately clear and police could not immediately say whether he also held Israeli nationality.
Unconfirmed reports in the Israeli media said the gunman, who was believed to be in his 20s, had arrived in the country as part of an American-Israeli exchange programme.
"From what we understood from the hotel staff, one of the workers who had been dismissed from the hotel entered the dining room and started firing everywhere," a hotel guest called Alon Raz told the radio station of the Ynet news website.
"All the guests ran outside towards the pool and started shouting at everyone to go into their rooms," he said.
Police said hotel guests had been ordered to return to their rooms for their own safety until the gunman was apprehended.
In recent years, the crowded tourist resort of Eilat, which lies at the southernmost tip of the Jewish state and close to the borders of Egypt and Jordan, has been a target for attacks by Sinai-based militants.
In August, two blasts rocked the city, and there were two similar attacks in April that caused slight damage but no casualties.
In August 2010, several rockets fired from Sinai, apparently aimed at Eilat, slammed into the nearby Jordanian port of Aqaba, killing one person and wounding five.