There was widespread panic at Mahaneh Yehuda shuk on Thursday night after social media accounts falsely reported that a fight occurring was a terror attack, Israeli media reported.
Footage circulating online revealed panicked masses and people screaming.
Social media reports claimed the incident was a shooting attack, according to Maariv.
People run in fear
"Suddenly, people ran towards us in hysteria, shouting 'terrorist, terrorist,'" an eyewitness told N12. "We started running, we left everything on the tables."
Another witness told N12, "There were people with babies in their arms who were crying, everyone was running and shouting that there was a terrorist attack. A huge mass of people were running in panic."