Three Palestinian militant groups claimed responsibility for the attack although the Israeli authorities say they believed Dwayat acted alone and was not a member of any group.

Correspondents said Dwayat's home in east Jerusalem showed no sign of the crowds and banners that normally accompany the funerals of Palestinian militants.

Palestinian civil rights activist Hassib Nashashibi said Dwayat had received a heavy fine and demolition order from the Israeli authorities for carrying out illegal building work, which may have provided a motivation.

Other reports say the the father-of-two - a devout Muslim married to a Palestinian woman - may have been seeking revenge for experiences in the past including a failed love affair with a Jewish Israeli woman and a spell in prison.

"Everyone is in shock," said a family friend.

Baby thrown clear

Medics said he killed two women and a man and injured more than 45 people as he drove about 200m along the busy Jaffa Road, one of west Jerusalem's main thoroughfares.

Another woman threw her baby out of her car window when she saw the 20-tonne construction vehicle bearing down on her. She was injured but her baby was unharmed.

Correspondents say the attack has put extra strain on the uneasy coexistence between the city's Jews and their Arab neighbours, many of whom work in the construction industry.

The Palestinian Authority condemned the attack, but the Hamas group, which controls the Gaza Strip said it was a "natural reaction to the aggression and crimes" of the Israeli occupation.

"Those who refuse to condemn this act of terror are exposing themselves for what they really are - namely the enemies of fundamental human values," said Israeli government spokesman Mark Regev.

Apart from a gun attack in March, Jerusalem has seen relatively little violence in the last three years.

Since the start of 2008, across Israel and the occupied territories, 29 Israelis have been killed in violence linked to the conflict as have more than 400 Palestinians.