A gunman has opened fire on a bus near the Old City of Jerusalem, wounding eight people, including a pregnant woman, in a terrorist attack that comes a week after fighting between Israel and Palestinian militants in the Gaza Strip left 49 Palestinians dead.

Two people are in a serious condition after the pre-dawn shooting spree on Sunday. The pregnant woman’s baby was delivered by emergency caesarean section after she suffered abdominal wounds, and a man with gunshot wounds to the head and neck also remains in hospital, according to doctors treating them.

A family of four from the US who had been waiting for a taxi were among the casualties, according to Israeli media. The US ambassador to Israel, Tom Nides, confirmed that several American citizens were among the wounded, but did not disclose details, citing privacy concerns.

Local media reported that suspect Amir Sidawi, a 26-year-old resident of occupied East Jerusalem, targeted a public bus as the driver was helping a disabled woman board at a bus station near the Green Line which divides the holy city. He also shot at passing cars and pedestrians further up the street.

“I was coming from the Western Wall. The bus was full of passengers,” driver Daniel Kanievsky told reporters in front of his bullet-riddled vehicle.

“I stopped at the station of the Tomb of David. At this moment, the shooting started. I saw two people outside falling, two inside were bleeding. Everybody panicked.”

After the suspect fled on foot to the nearby neighbourhood of Silwan in East Jerusalem, Israeli security forces sealed a large area and launched a manhunt using helicopters.

Later on Sunday, police said Sidawi turned himself in after arriving at a police station in a taxi. He had reportedly been worried about consequences for his family after three relatives, including his mother, were arrested in the wake of the attack.

Speaking at a cabinet meeting, the Israeli prime minister, Yair Lapid, said the suspect had operated alone and that he had previously been arrested by Israeli police. The caretaker leader had earlier warned in a statement that “all those who seek us harm should know that they will pay a price”.

Israeli investigators inspect the bus after the shooting. Photograph: Ammar Awad/Reuters

The Jerusalem shootings come a week after the end of a three-day conflict between Israel and Palestinian Islamic Jihad, the second largest militant group in the blockaded Gaza Strip after Hamas.

A surprise Israeli offensive, which the country said was meant to thwart threats from the group to respond to the arrest of a senior commander in the occupied West Bank, was met with retaliatory rocket fire from Islamic Jihad targeting southern Israel.

Forty-nine Palestinians, including 17 children and 14 militants, were killed and several hundred injured in the fighting, which ended with an Egyptian-brokered ceasefire. No Israeli was killed or seriously injured, and the conflict did not spiral into all-out war because Hamas, which controls the strip, decided to stay on the sidelines.

On Monday, a day after the truce, Israeli troops also killed three Palestinian militants and wounded dozens of people in a shootout that erupted during an arrest raid in the West Bank city of Nablus.

In a statement, Hamas praised Sunday’s shootings in Jerusalem, calling it a “heroic operation” without claiming responsibility.

Tariq Izz a-Din, a member of Islamic Jihad, called the attack “the reaction to the Israeli aggression against Gaza”.