Security camera footage showed mayor Nir Barkat, in a white shirt, walk towards the suspect together with his bodyguard and lunge at him, pinning him down on a pedestrian crossing before others took charge and detained the man.
Before Barkat intervened, the distant but distinct black-and-white footage showed a man waving his arm in a stabbing motion and making contact with one individual and attempting to stab others as they waited to cross the road. When they realised what had happened, the pedestrians ran clear.
The stab victim was rushed to hospital but was not seriously hurt, medical officials said. Police said the suspect, an 18-year-old Palestinian, did not have authorisation to reside in Israel.
"My bodyguard took out his weapon and when he aimed at the terrorist, the terrorist dropped his knife and we immediately tackled him on the ground to make sure that he cannot continue with the terror attack," Barkat told reporters shortly afterwards.
Barkat, 55, served as an officer in the paratroopers' brigade. A former high-tech entrepreneur, he was elected as Israel's mayor of Jerusalem in 2008.
Jerusalem has been the scene of many attacks in recent years. Most recently, late last year tensions rose again over access to a holy site in an Israeli-annexed part of the city where al-Aqsa mosque now stands and Biblical Jewish temples once stood.
Eleven Israelis have been killed, including four rabbis and a policeman stabbed and shot by Palestinians in a Jerusalem synagogue. Twelve Palestinians have also been killed, including several of those who carried out the attacks.
Israel annexed East Jerusalem, in whose walled Old City the compound is located, as part of its capital. This status is not recognised abroad. Many world powers support the Palestinians' goal of setting up their own future capital in East Jerusalem.
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