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UPDATE 1-Israeli police say Palestinian driver shot dead after ramming attack

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JERUSALEM, May 20 (Reuters) - An Israeli policeman shot dead a Palestinian driver in East Jerusalem on Wednesday after he rammed into two policewomen, injuring them, a police spokesman said.

Israel Radio aired remarks by the driver's relatives, suggesting the incident was an accident and he was wrongfully killed.

Describing the driver as an "Arab terrorist", the police spokesman said the policewomen had been lightly hurt in the incident.

A witness said he saw the driver, identified as a 40-year-old East Jerusalem resident, run down one of the policewomen. The policeman then shot him several times.

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Palestinians seek statehood in East Jerusalem, which was among territories Israel captured in the 1967 Middle East war. Israel deems all of the holy city its capital, a status not accepted internationally. With U.S.-backed peace talks stalled for more than a year, Jerusalem has seen a surge in violence.

(Writing by Dan Williams and Ali Sawafta; editing by Ralph Boulton)

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