Police are still conducting a massive manhunt for the Tel Aviv gunman who killed two and wounded seven others in an attack on Friday.

An Israeli Arab called Nashat Milhem is believed to be the shooter who targeted a group celebrating a birthday, firing an automatic weapon before fleeing.

Reports on Sunday indicated that the 29-year-old gunman then hailed a taxi and rode to the north of the city before killing his driver and leaving the vehicle.

The shooting on Friday happened in the centre of the city, at the Simta bar on the corner of Dizengoff Street and Gordon Street.

Security camera footage showed the suspect pulling a weapon from his backpack and shooting.

The two dead were identified as Alon Bakal, 26, manager of the bar, and 30-year-old Shimon Ruimi from the southern Israeli city of Ofakim.

Around 30 shots were reportedly fired during the attack.

It is thought that the suspect may have stolen the weapon used in the attack from his father, who is a volunteer police officer.

Mr Milhem was detained by police in 2007 after attacking a soldier with a screwdriver and trying to grab his gun.

During questioning he is believed to have said he wanted revenge for the death of a cousin allegedly killed by police in 2006.