JERUSALEM (Reuters) -A gunman opened fire on a vehicle in East Jerusalem on Tuesday, wounding two people, Israeli emergency services said.

The attack comes after a year of escalating Israeli Palestinian violence and high tension during the Muslim holy month of Ramadan which coincided this year with the Jewish Passover holiday.

Israeli police said the suspected attacker opened fire on a vehicle in the Sheikh Jarrah area of East Jerusalem, where there have been severe tensions between Palestinians and Jewish settlers in recent years.

Ambulance services said two people had been moderately hurt and police said they were searching for the suspected attacker.

In a separate incident, the Israeli army said a house in a kibbutz in northern Israel had been hit in a shooting attack but no injuries were reported.

Israel annexed East Jerusalem, which includes the walled Old City and its holy sites, after the 1967 Middle East War in a move not recognised internationally. It sees Jerusalem as its eternal and undivided capital.

Palestinians want East Jerusalem as the capital of a future independent state.

(Reporting by Maayan Lubell, Writing by James Mackenzie; Editing by Kim Coghill and Clarence Fernandez)