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TEL AVIV — A hunt was launched Friday for a gunman who killed at least two people and injured seven others outside a cafe-bar in downtown Tel Aviv, officials said.

The search was sparked after the assailant opened fire on a group of people outside the venue, Israeli police spokeswoman Luba Samri said in a statement.

Police spokesman Micky Rosenfeld said officials were investigating whether the incident was terror-related.

Of the seven people wounded, two were in severe condition and five were moderate, according to police. The injured were treated by medical teams and sent to the hospital.

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"I hid in a shed near the place of the shooting," a witness, who gave his name as Osnat, told Israel's Army Radio.

"I heard load noise of shooting, we were ready that any second the shooter [would] enter where we hid. I'm still shaking."

The shooting happened on the corner of Dizengoff and Gordon Streets, a vibrant area blocks away from the beach that features a lot of shops, cafes and bars.

Nati Shakked, owner of a nearby bar that was hit by gunfire, said the assailant had waited on a bench outside before taking a machine-gun out of a bag and "shooting in every direction".

"It was a terrorist attack, without a doubt," he told Israel's Channel Two television.

The attack comes amid more than three months of almost daily Palestinian attacks against Israeli civilians and soldiers. On the Israeli side, 25 people have been killed, mostly in stabbings, shootings and car-ramming attacks. At least 131 Palestinians have been killed by Israeli fire, 90 of them identified by Israel as assailants. The rest died in clashes with security forces.

Tel Aviv Mayor Ron Huldai visited the wounded in hospital and later said he spoke with those who were able to talk. He said that inside the bar, "friends were celebrating a birthday and a man opened fire at them from the outside."

A policeman runs at the scene of a shooting incident in Tel Aviv, Friday. NIR ELIAS / Reuters

He said "lessons will be learned" to improve security.

Channel 10 reported that an assault rifle was used in Friday's attack and that about 30 shots were fired. It said that Israeli police and special forces are going house to house in the area, searching for the gunman.

At around midnight Friday night local time, "multiple" rickets were fired from the Gaza Strip into Israel, the Israeli Defense Forces said in a statement. No injuries were reported.