A Palestinian man is in police custody following a rampage on Saturday night at a Tel Aviv club which left eight people wounded, some of them severely.

Shortly after 1am outside the popular club Haoman 17, a man drove a stolen taxi through a police checkpoint. He then left the car and began stabbing partygoers and police.

Many of the 2,000 people at the club were students celebrating the end of summer.

Police, who at first thought the man was a drunk driver, have since described the incident as a terrorist attack.

The man, who is 21 and from Nablus, was said to be shouting "Allah hu Akbar" as he brandished the knife.

Among those injured were three border policeman, as well as bouncers from the club.

One of the officers is still in a serious condition in hospital. Nahman Aji, whose taxi the man stole, said the man pulled out a knife and forced him to leave the vehicle.

"Had I know n that he was a terrorist I would have attacked him, even if it would have meant my death," he told Ha'aretz.