The gunman, a 37-year-old from a nearby village, was also shot and died later.
Police say he pulled out a gun as he waited to enter Har Adar along with Palestinian labourers and opened fire on police and security guards.

It is the latest in a wave of attacks on Israelis, mostly by Palestinians or Israeli Arabs, since late 2015.
There has been no claim of responsibility, although Gaza-based Palestinian militant groups Hamas and Islamic Jihad have welcomed the attack,
The victims suffered gunshot and stab wounds, and four other people were seriously injured, the Israeli ambulance service said.
The identities of the Israelis shot dead are being withheld by the authorities, the Jerusalem Post newspaper reports.
At least 50 Israelis and five foreign nationals have been killed in stabbing, shooting and car-ramming attacks since October, 2015.
More than 255 Palestinians - most of them attackers, Israel says - have also been killed in that period. Others have been killed in clashes with Israeli troops.
Israel says Palestinian incitement has fuelled the attacks. The Palestinian leadership has blamed frustration rooted in decades of Israeli occupation.

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