Israeli police said Sunday they had arrested a suspect in a pre-dawn gun attack on a bus in central Jerusalem that wounded eight people, two critically, according to an updated casualty toll. 

"The terrorist is in our hands," police spokesman Kan Eli Levy told public radio after the attack that took place not far from the Western Wall.

A gunman started spraying bullets at the public transport bus and people outside the vehicle in the pre-dawn attack at the Tomb of David bus stop, recounted bus driver Daniel Kanievsky. 

"I was coming from the Western Wall. The bus was full of passengers," he later told reporters in front of his bullet-riddled vehicle.

Israel's emergency medical services, the Magen David Adom (MDA), called the incident a "terror attack in the Old City." 

Local police and medics previously said that seven people were wounded in the shooting, with two in critical condition.