Heavy security had been deployed in the area while the part of the family home in which Husam Dweiyat had lived was demolished as a deterrent against future attacks on Israelis.
Last month, Dweiyat's parents lost an appeal in Israel's supreme court against the order to demolish part of their home, despite a military commission ruling in 2005 that such a policy was ineffective.
Police described the incident, which also injured 20 people, on Jerusalem's Jaffna Road on July 2 as a "terrorist attack", but a lawyer for Dweiyat's family say he was suffering from a mental illness.
Dweiyat was shot dead at the scene by police and a passerby.
Three weeks later, another Palestinian driving a digger injured 16 people in west Jerusalem before being killed by police.
In the latest such attack last month, a Palestinian was killed after his vehicle crushed a police car and hit other vehicles.
Israeli officials said the demolitions were needed to stop the spate of apparent attacks, but human rights groups have called them collective punishment.