Two other pedestrians were wounded in the attack. The Palestinian suspect then chased another Israeli with a screwdriver and was shot by an armed civilian passerby.
The attacker is in hospital and will survive his wound.
The incident took place at the West Bank's Tunnel's Checkpoint between the Palestinian village of Husan and the settlement of Beitar Illit, not far from Jerusalem, along Route 60.
Over the past four months, 10 Israelis and a foreign visitor have been killed by Palestinians in knife or car-based attacks.
Tensions in Jerusalem have been running extremely high after several terror attacks occurred over the last several weeks.
Most recently, a terrorist entered a supermarket in a settlement on the outskirts of Jerusalem on December 3 and stabbed two middle-aged Israelis.
That attack occurred mere days after a vicious attack in a Jerusalem synagogue that killed five - four worshipers at the scene and a police officer who died later of his wounds.
Their mother/aunt was also burned.
Another victim was a 40-year-old man with acid wounds to the face and eyes.
BOTTOM LINE...AS LONG AS THERE IS TIME, THERE WILL BE MUSLIMS HOPING TO KILL ALL JEWS, AND JEWS RESISTING THAT...AS ANY WHO READS HERE WOULD RESIST BEING KILLED.
AND YET, IF A MILLION JEWS PERISHED, FEW WOULD WEEP, BUT IF ONE ACID-SLINGING, WOULD-BE CHILD KILLER GETS WOUNDED TRYING TO KILL THEM, LOOK HOW MANY WEEP AND WAIL.
SEE IT FOR WHAT IT IS... OR SEE IT THROUGH TERRORIST EYES?
IF ANYONE THREW ACID AT YOUR CHILD, WHAT WOULD YOU DO?