After being kept off the bus, the Palestinians stabbed an Israeli man at a bus stop in the city of Beit Shemesh, west of Jerusalem, said police spokeswoman Luba Samri.
Police officers shot the two attackers, wounding both of them, she said. They and the Israeli they stabbed were hospitalized, and one of the Palestinians later died of his wounds.
The stabbing Thursday is the latest attack in a wave of deadly violence involving Palestinians and Israelis. It took place on the same day that U.S. Secretary of State John Kerry met with Israeli Prime Minister Benjamin Netanyahu in Berlin to discuss the crisis.
Police: Attackers wore radical group's symbol
But the bloodshed continues.
The two attackers Thursday were wearing shirts with the symbol of a radical Islamist group, Samri said. Police identified them as being from the town of Zurif in the West Bank.
Islamic militant groups have praised the series of knife and gun assaults by Palestinians in recent weeks but haven't claimed responsibility for them.
Israeli leaders have accused Palestinian officials, including Abbas, of inciting the attacks.
Many Palestinians say the anger driving the violence is fueled by the heavy presence of Israeli security forces in the West Bank and East Jerusalem, as well as recent restrictions on Palestinian access to a contested holy site in the Old City of Jerusalem.
Dozens of Palestinians have been killed and many more wounded in clashes with Israeli security forces so far this month.
Four suspects in Eritrean man's death
Police said Thursday that four people suspected of involvement in the mob beating death of an Eritrean man
during one of Sunday's attacks had been freed on bail.
After a gunman killed an Israeli soldier in Beer Sheva, the Eritrean was apparently misidentified as a second attacker, beaten and shot.
Samri, the police spokeswoman, said two civilians and two prison guards had been released "with a monetary deposit and no house detention."
"The investigation continues and more arrests of suspects are expected," she said.
Kerry and Netanyahu meet
Greeting Kerry ahead of their meeting in Berlin, Netanyahu blamed the violence on what he called incitement by Abbas and the Islamist group Hamas.
"I think it's time that the international community told President Abbas to stop the incitement and hold him accountable for his words and his deeds," Netanyahu said.
"I think it's time for the international community to say clearly to President Abbas: Stop spreading lies about Israel, lies that Israel wants to change the status quo on the Temple Mount, lies that Israel wants to tear down the al-Aqsa Mosque, and lies that Israel is executing Palestinians. All of that is false," he said.
The holy site in Jerusalem that Israelis call the Temple Mount, known to Muslims as the Noble Sanctuary, has been one focus of the recent tensions.
Jews are not allowed to pray on the Temple Mount, where the al-Aqsa Mosque and Dome of the Rock are situated, but right-wing Israeli politicians have called for that to change.
That has set off widespread concern among Palestinians that the status quo is being undermined and that division of the site is coming -- a claim the Israeli government has repeatedly denied.
"We remain committed to the status quo, we are the ones that protect all the holy sites, and Israel is acting to protect its citizens as any democracy would in the face of such wanton and relentless attacks," Netanyahu said Thursday.
Kerry said it was important to find ways to move "beyond the condemnation and beyond the rhetoric."
"It is absolutely critical to end all incitement and all violence and to find a road forward to build the possibility that is not there today for a larger process," he said. "I talked with (Jordan's) King Abdullah yesterday. I have talked with President Abbas. I believe people want this to de-escalate. So let's go to work and see what we can do."
'Cautious measure of optimism'
"I would characterize that conversation as one that gave me a cautious measure of optimism that there may be some things that could be, in the next couple of days, put on the table which would have an impact, I hope, on the perceptions of everybody engaged that there is a way to defuse the situation and begin to find a way forward." Kerry said.
"If anything, what is happening now is a urgent call to all with any responsibility -- and there are many countries that bear responsibilities with respect to this region -- to help to try to resolve these age-old differences in a frozen conflict," he said.
A day earlier, Netanyahu drew widespread criticism
for a speech in which he suggested that Nazi Germany's "Final Solution" to kill all Jews had been the idea of a Palestinian -- Haj Amin al-Husseini, a former grand mufti of Jerusalem -- rather than Adolf Hitler.