The shooting took place next to a café on the corner of Dizengoff Street and Ben Gurion Street, the Magen David Adom (MDA) ambulance service said, according to The Times of Israel.
“We evacuated the three with gunshot wounds, one of them in critical condition, one seriously wounded and one lightly wounded,” MDA director Eli Bin told Israel’s Kan television.
Israeli police announced that the assailant had been “neutralised” but provided no details about the circumstances of the shooting, which they said could be “a terrorist attack”.
Shootings in Tel Aviv – a densely populated commercial and cultural capital – are rare.
Israel’s Prime Minister Benjamin Netanyahu reacted to the news, saying, “A very serious attack in Tel Aviv, a terrorist attack … sending recovery wishes to the injured,” he said.
“We are strengthening the police and security forces – this will not weaken our determination to plant roots in our homeland,” he added.
National security minister Itamar Ben-Gvir later stated the gunman had been killed.
“A serious attack in Tel Aviv… I congratulate the police officer who, in a courageous act, eliminated the heinous terrorist and saved many lives,” he said in a statement.
In light of the attack, Tel Aviv Mayor Ron Huldai called on anti-government protesters to clear the streets to allow police to secure the area, The Times of Israel reported.
Rallies have been held since early January when Netanyahu’s government proposed legislation to limit the Supreme Court’s powers.
If passed, the law will curb the Supreme Court’s powers to rule against the legislature and the executive, while giving legislators decisive powers in appointing judges.
The incident also comes amid heightened tension in the occupied West Bank.
Israeli settler-related violence against Palestinians has skyrocketed since Netanyahu came back to power at the helm of a right-wing coalition that seeks to expand illegal settlements in the occupied West Bank and pursue other anti-Palestinian policies.
