Sources within the IDF said the three went to the Temple Mount and prayed at the Al-Aqsa Mosque before the attack.
According to Israeli media reports, two of the terrorists were part of a local cell not affiliated to Hamas or any other organisation, which was known for rock and firebomb attacks.
Prime Minister Benjamin Netanyahu hit out at Palestinian incitement, saying: "I demand that the Palestinian Authority condemn the terror attack at Damascus Gate last night, and I expect the world to do the same."
Defence Minister Avigdor Lieberman also blasted Palestinian incitement, saying: "We will continue to fight vicious Palestinian terror and relentless incitement with all our might. The Palestinian Authority's thundering silence and refusal to condemn terror, as well as the statement by Fatah – that Abbas heads - that Israel murdered three innocent people, prove there is no partner."
Following the attack, Israel withdrew 250,000 permits allowing Palestinians to visit Israel for Ramadan.