Prime Minister Benjamin Netanyahu on Thursday said Israel was facing a "wave of terror" that was mostly unorganised, pledging action against those inciting violence, but warning there was no "magic solution."

He spoke at a news conference after days of unrest that have seen riots in east Jerusalem and the West Bank and a spate of stabbing attacks targeting Israelis.

The unrest has sparked fears that a third Palestinian uprising, or intifada, could erupt.