WASHINGTON, Oct. 22-- The United States on Wednesday denounced a terrorist attack in East Jerusalem and urged all sides to refrain from further escalations.

"The United States condemns in the strongest possible terms today's terrorist attack in Jerusalem," State Department spokeswoman Jennifer Psaki said in a statement, calling on all sides to "maintain calm and avoid escalating tensions in the wake of this incident."

A three-month-old baby was killed and eight others were wounded late Wednesday when a Palestinian rammed a vehicle into a crowd of commuters at a light rail station in East Jerusalem, police and witnesses said.

Israeli media said the driver is a Hamas member who had served time in an Israeli prison for "security offenses". A Hamas spokesman lauded the attack, calling it "a natural reaction to the crimes of the occupation", but stopped short of claiming responsibility.

A senior police official said the dead infant and several of the wounded are U.S. citizens.

"We express our deepest condolences to the family of the baby, reportedly an American citizen, who was killed in this despicable attack," Psaki said.

Israel occupied East Jerusalem and the West Bank in the 1967 Six-Day War. The Palestinians want the lands to be part of their future state along with the Gaza Strip.