After two Palestinians burst into the synagogue armed with a gun and meat cleavers, killing four worshippers and wounding nine other people, Prime Minister Benjamin Netanyahu pledged a harsh response to the brutal murders.
Israel has already progressively upped security in and around the Holy City following a series of deadly incidents involving lone Palestinian attackers.
Political and security analyst Daniel Nisman said there was likely to be a "bigger deployment" of police and border police throughout Jerusalem and even talk of deploying the army in the annexed eastern sector.
"There's other talk of bringing the IDF (army) into east Jerusalem neighbourhoods, but that hasn't been confirmed or approved," he said.
The city has been on edge since the summer with almost nightly clashes in Arab east Jerusalem and a growing number of deadly attacks that began in August as Israel pressed a deadly 50-day offensive in the Gaza Strip.
Nisman said the latest attack had ramped up tensions even more.
"To stop these attacks, the only thing you can really do is to close off those (east Jerusalem) neighbourhoods, but that's a double-edged sword," he told AFP.
"You could risk increasing tensions with the people there, the majority of whom don't want an escalation."
'LONE WOLF' PROBLEM
Mark Heller, a political analyst at the Institute for National Security Studies in Israel (INSS), said cracking down would be difficult.
"There is no magic solution. There's not much you can do against 'lone-wolf' attackers who wake up in the morning and decide all of a sudden to act," he told AFP.
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"The government will undoubtedly toughen its stance, but this will not solve the problem."
One possible recourse is razing the homes of the perpetrators, as pledged by Netanyahu earlier this month in the wake of two deadly attacks in which Palestinians rammed their cars into groups of pedestrians, killing four Israelis and wounding more than a dozen.
Before Tuesday's attack, the homes of four east Jerusalem Palestinians involved in anti-Israeli attacks were earmarked for demolition. So far, none of them has been razed.
The demolition of homes has been condemned by rights groups and even the army has said such retribution may be counter-productive.
"The Israeli government believes these are proven deterrent methods... But there haven't been any (demolitions) yet. Every measure you implement does have a drawback," Nisman said.
Kobi Michael, another expert at the INSS, said the situation was already on a knife edge.
"Everyone's nerves are frayed. This event has the potential of being a game changer," he told AFP.
He said Israel had already put in place a large number of measures -- greater law enforcement, harsher legislation against stonethrowers, interrogations, planned house demolitions -- and it was unclear whether it would do any more.
"There are limits to what you can do," he said.
"The more security forces you have, the more friction and chance of attacks - which could lead to an escalation neither side wants," he added.
US, RUSSIA URGE RESTRAINT
Both the United States and Russia strongly condemned the synagogue attack but urged restraint.
"At this sensitive moment in Jerusalem, it is all the more important for Israeli and Palestinian leaders and ordinary citizens to work cooperatively together to lower tensions, reject violence and seek a path forward towards peace," US President Barack Obama said.
The Russian foreign ministry urged the two sides "to take urgent measures to rein in extremists, whose actions threaten to explode the situation entirely".