Two female terrorists shot in stabbing at iconic outdoor market in the capital, after leaving two wounded.

On Monday morning two female Arab terrorists aged 14 and 16 conducted a stabbing attack on Yafo Street adjacent to Jerusalem's iconic outdoor Mahane Yehuda market, a centrally located site that attracts hundreds of Israelis and tourists alike.

The terrorists left two civilians wounded before being neutralized by gunfire from security forces, with the fire killing one of them - ironically the victim they chose in their stabbing was a 70-year-old Arab resident of Bethlehem, who they apparently mistook for a Jew.

Large police and Magen David Adom (MDA) provided treatment to four people wounded in the attack.

Hadassah Ein Kerem Hospital in the capital reports that two lightly wounded victims were brought there for treatment, including a 70-year-old man who was stabbed in the head and back but remained conscious, as well as a 27-year-old man suffering from bullet wounds to his hand who likewise was conscious.

In addition MDA teams are treating a number of shock victims at the scene.

Meanwhile the second female terrorist, who was not killed by security forces' gunfire, was evacuated to Shaare Tzedek Hospital with two gunshot wounds in her stomach in serious but unstable condition. She was brought into the operation room.

Jerusalem district police issued a statement reporting that two female terrorists armed with scissors stabbed a man adjacent to the market, at which point an officer noticed the attack and opened fire on them.

Both attackers held blue Israeli ID cards indicating residency status.

Scissors used in the attack: