A Palestinian woman stabbed and wounded an Israeli man near an east Jerusalem flashpoint on Saturday, before she was arrested, police said.
They said in an English-language statement that the incident occurred next to the Old City's Damascus Gate, site of repeated past attacks.
It said that a "female Arab terrorist" stabbed the man, injuring him lightly.
The woman, a Jerusalem resident aged about 30, was arrested at the scene, police added.
The Old City is located in east Jerusalem, which was occupied by Israel in 1967 and later annexed in a move never recognised by the international community.
The July 14 killing there of two policemen by three Arab Israeli gunmen led to spiralling unrest after Israel responded by installing metal detectors at the entrance to the Al-Aqsa mosque complex, used as a staging point for the attack. For nearly two weeks, worshippers refused to submit to the checks and staged mass prayers in surrounding streets. Ensuing protests left six Palestinians dead.
The crisis abated when Israel removed the detectors but tension remains high.
A wave of unrest that broke out in October 2015 has killed 293 Palestinians or Arab Israelis, 47 Israe lis, two Americans, two Jordanians, an Eritrean, a Sudanese and a Briton, according to an AFP toll.
Israeli authorities say most of the Palestinians killed were carrying out knife, gun or car-ramming attacks.
Others were shot dead during protests or clashes, while some were killed in Israeli air strikes on the Gaza Strip.