Police had initially said there might be a third attacker but later ruled that out after extensive searches and examining security camera footage.
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Tel Aviv Mayor Ron Huldai visited Ichilov Hospital after the shooting, vowing that the city would “continue with our lives”.
The Israeli news site Ynet reported that five people had been wounded in the attack, four of them seriously and one critically.
The two attackers, who are reportedly members of the same family, entered the Max Brenner restaurant where they ordered brownies, however, before touching the food they pulled out their weapons and started shooting, the Times of Israel reported.
Since October 2015, increased tensions in the occupied Palestinian territories and Israel have boiled over into violence.
The three dead are Israelis, Israeli police spokesman Micky Rosenfeld said in a statement.
A saleswoman at a clothing chain, Meital Ganon, said clients also ran into her store, shouting “Terrorists! terrorists!”
“When I arrived at the scene I saw a woman who was unconscious and not breathing and in critical condition”, he said. And in March a Palestinian went on stabbing spree, killing an American and wounding 7 other people before he was shot and killed.
The attacks “clearly demonstrate the threats that they face and unfortunately for the United States it demonstrates the threats that we face as well, because it’s the same men”, Kerik said.
At one point, there appears to be around 12 people at the door trying to escape.
The Jerusalem Post reported in April that Tel Aviv police wanted to close the market because of “security flaws and safety shortcomings that present a risk to the public’s safety”.
Israeli security forces inspect a restaurant following a shooting attack in the coastal Mediterranean city of Tel Aviv on June 8, 2016.
Prime Minister Benjamin Netanyahu returned from a trip to Moscow shortly after the attack and was whisked to the Defense Ministry to be briefed by the heads of the police, military and intelligence services, his office said in a text message.
Sarona Market is a trendy, newly-opened leisure district in central Tel Aviv.
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Most of the Palestinians killed were carrying out knife, gun or car-ramming attacks, according to Israeli authorities.
