Israel has rejected an appeal by the five biggest members of the European Union not to raze the homes of Palestinians who carried out lethal attacks in Jerusalem, saying the tactic was to deter further violence.

Israel's Haaretz newspaper said the Foreign Ministry heard arguments from the German, French, British, Italian and Spanish ambassadors that the demolitions, carried out against one east Jerusalem dwelling this week and planned against four more, were liable to inflame tensions and were counterproductive.

Confirming Thursday's meeting with the envoys, Foreign Ministry spokesman Emmanuel Nahshon said they were told that the measure was consistent with Israeli law and would be pursued.

Unrest has been stoked by deadlocked Palestinian statehood talks, the Gaza war and calls by some Israeli figures to allow Jewish prayer at a Jerusalem compound that houses Islam's third-holiest mosque and is the vestige of Judaism's biblical temples.

In a surge of lethal street violence in the holy city, three Palestinians rammed cars into Israelis and two others went on a gun and knife rampage in a synagogue.

The assailants, all from areas of Jerusalem occupied by Israel in the 1967 war and where the Palestinians claim sovereignty, were killed by police. Nine Israelis and one foreign woman were killed in the attacks.