One of the alleged attackers was arrested, and a doctor has told Sky News the other suspect is in a stable condition after being taken to hospital for treatment.
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Spokeswoman Luba Samri said there were reports of shooting in two locations close to the popular open-air Sharona market.
The gunmen, who are reportedly from Yatta, a Palestinian village near Hebron in the West Bank, are both in custody.
In a similar attack in Tel Aviv five months ago, an Israeli Arab killed two people on a main shopping street and the driver of a taxi he used to flee the scene.
The shooting occurred at the Sarona market, a series of restored buildings that have been transformed into a popular tourist spot filled with crowded shops and restaurants.
At one point, there appears to be around 12 people at the door trying to escape.
Rosenfeld said the area has been evacuated.
Prime Minister Benjamin Netanyahu, returning from a visit to Moscow, convened consultations with security officials at the Defence Ministry in Tel Aviv after the attack. “Terror in Tel Aviv must be treated the same as terror in Paris or Istanbul”.
According to the Palestinian health ministry, Israeli forces and illegal settlers have killed at least 209 Palestinians, including alleged attackers and protesters since October. One victim had been shot in the head and at least two others had chest wounds, medics said. Another said one shooter was carrying a “large” weapon.
The attacks began in Jerusalem and the majority of the violence has centered on Israeli settlements in the West Bank. In response, UN Secretary-General Ban Ki-moon denounced the shooting in an official statement and criticized Hamas leaders for glorifying those who commit such heinous acts.
Speaking Ichilov hospital, Tel Aviv Mayor Ron Huldai urged poeple to stay calm, and stay out of danger.
“No terrorism will bring us down”, he said.
Israeli security forces inspect a restaurant following a shooting attack in the coastal Mediterranean city of Tel Aviv on June 8, 2016. We will continue to live in this city of Tel Aviv.
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U.S. State Department spokesman Mark Toner condemned the “horrific terrorist attack” in a statement, saying “cowardly attacks against innocent civilians can never be justified”.
