Bulldozer terror as digger driver goes on the rampage near Barack Obama's hotel

The drama happened on Tuesday close to a hotel where U.S. presidential contender Barack Obama was due to arrive a few hours later.

More than 20 people were hurt, including a baby, after the man roared out of a building site and smashed into a bus and five cars.

Police officers stand guard at the scene of the attack in Jerusalem

One man's leg was severed when the attack overturned his car. A bus driver and a pedestrian narrowly escaped death as the bulldozer rolled towards them, its shovel aimed at their heads.

The driver, who came from a village in the occupied West Bank, was shot and wounded by an Israeli settler, father-of-eight Yaki Asael, 56, then killed by a hail of bullets from a police patrol.

The attack was a copy of another rampage in the city three weeks ago, which killed three people and injured 60.

Obama, who was due to fly to Israel last night, said his 'thoughts and prayers go out to all who were injured, and to their families'.

Visit: Barack Obama at the Citadel in Amman, Jordan, prior to his Israel visit

Speaking in Amman, Jordan, he said: 'Today's attack is a reminder of what Israelis have courageously lived with on a daily basis for far too long. I strongly condemn this attack and will always support Israel in confronting terrorism and pursuing lasting peace and security.'

The Democrat Senator, who will hold talks with Israeli and Palestinian leaders today, was due to stay at the King David Hotel, 200 yards from the scene of the attack. Police said they had no evidence to suggest a link.

The attack happened less than half a mile from the official residence of Israeli President Shimon Peres as he played host to Palestinian President Mahmoud Abbas. It was the first such visit by a Palestinian president.

Police identified the attacker as 22-year-old Ghassan Abu Teir, who was related to a militantly anti-Israel politician from the Islamic Hamas party.