Israel Channel 10 TV reported that the incident occurred at "Cafe Noir", a popular hangout frequented by the gay community in downtown Tel Aviv.

The station said that a man dressed in black entered the club and began shooting indiscriminately.

The report described the scene as a "bloodbath".

Police have ordered the temporary closure of all gay clubs in the Israeli city.

'Hate crime'

Soon after the incident, hundreds of Israelis held a rally in Tel Aviv in protest over the shooting, and candles were lit at the scene.

In video

Manhunt on for Tel Aviv gay club killer

Nitzan Horowitz, Israel's only openly gay member of parliament, condemned the shooting as a "hate crime".

He called it "without a doubt the biggest ever attack on the Israeli gay community".

"We are all in shock," he said.

Coastal, cosmopolitan Tel Aviv has a bustling gay scene, but open homosexuality is less welcome in conservative areas of Israel.

Annual gay pride parades in Jerusalem often turn violent with protests instigated by ultra-Orthodox Jews.