A young British woman has been stabbed to critical conditions and died on her way to the nearest hospital.
Shin Bet, the Israeli security agency, said in a statement: "This is another incident of many in which a Palestinian suffering from mental health or personal issues has chosen to carry out an attack as a way out of his problems".
The Israeli Embassy in the United Kingdom confirmed the victim was British.
A British woman has been stabbed to death on a train in Jerusalem.
A statement released from the University of Birmingham wrote: "We are deeply saddened to hear about the death of our student Hannah Bladon who was killed whilst on an exchange program in Jerusalem".
Police there have detained a 57-year-old man, calling him an "Arab terrorist".
The attack took place inside a carriage of the city's light rail train not far from the entrance to the Old City's Christian Quarter. The 57 year old outlaw was immediately arrested by the police and was recognized to be a familiar face for security forces. A spokeswoman for the British Consulate in Israel said that they are "providing support to her family" and that the Embassy was "in touch with local authorities".
Bladon had been taking classes in bible studies, archaeology and Hebrew at the Rothberg International School, part of The Hebrew University.
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The stabbing, which is the second time in weeks that a Palestinian individual has launched an attack in the city, comes as Jewish and Christian pilgrims congregate in the city for Holy Week, Good Friday, and Passover.
"A Palestinian terrorist murdered a 23-year-old student, a citizen of Great Britain, in cold blood", the premier said, sending condolences in the name of all of Israel.
Israeli secret service, the Shin Bet, said that Tamimi had tried to commit suicide by swallowing a razorblade while hospitalized. "Terror can never overcome us".
Netanyahu added that security forces are constantly fighting terror and prevented several attacks in recent days.
Israel says at least 162 of the Palestinians killed had launched stabbing, shooting or vehicle ramming attacks.
Friday's attack is the latest in a spate of stabbing, shooting and vehicular attacks by Palestinians against Israelis over the past 18 months.