Officials said the manhunt lasted for several hours and ultimately led them to a mosque in Jaffa, where the 29-year-old Hazem was killed.
Israeli police watch Palestinian Muslims walk to a mosque on Friday in the Old City of Jerusalem, the first Friday of Ramadan, after a terrorist shooting attack late Thursday killed three people in Tel Aviv. Photo by Debbie Hill/UPI
"After a long, difficult night of activity by the police, Shin Bet and IDF, we succeeded this morning - with operational and intelligence cooperation - to close the circle and kill the terrorist in an exchange of fire," Israeli Police Police Commissioner Kobi Shabtai said according to the Times of Israel.
Israeli Prime Minister Naftali Bennett praised security forces for killing the suspected assailant.
"Let every murderer know that we will find him. Those who aid and abet terrorists need to know that the price they will pay is too high to bear," Bennett said in a statement.
"I saw the father of the terrorist inciting to more violence and being proud of his son the murderer," Bennett added. "These are the people we are dealing with."
The victims of the attack were identified as Tomer Morad, 28, and Eytam Magini, 27. The third who died Friday was 35-year-old Barak Lufan.
Thursday's was the fourth deadly shooting attack in Israel in less than three weeks. Terrorist violence has killed more than a dozen people.