Palestinian cars were vandalised overnight in Israeli-annexed east Jerusalem, in an attack that bore the hallmarks of a hate crime by rightwing Israeli extremists, victims and police said on Sunday.

Eight vehicles belonging to the same family had their tyres slashed, and one was daubed with the slogan in Hebrew reading "Price tag Gaza," suggesting the vandalism was a response to massive Palestinian rocket fire during the recent Gaza flareup.

Amir Tamimi, whose family owns the cars, blamed the attack in the Shuafat neighbourhood on religious residents from the nearby Ramat Shlomo settler neighbourhood.

"They want revenge over Gaza," he told AFP, referring to the eight-day conflict that saw Israel pressing a relentless bombing campaign over the Hamas-run strip which ended on Wednesday with an Egyptian-brokered truce agreement.

Police spokesman Micky Rosenfeld confirmed the details of the incident, adding there were currently no suspects.

"An investigation has been opened; we're looking into it," he said.

"Price tag" is a euphemism for revenge hate crimes by Israeli extremists, which normally target Palestinians and Arabs, originally in retaliation for state moves to dismantle unauthorised settler outposts.

The attacks tend to involve the vandalism or destruction of Palestinian property and have included multiple arson attacks on cars, mosques and olive trees. The perpetrators are rarely caught.

Last year, police say 65 indictments were handed to extremists suspected of assault or for causing property damage in price tag attacks.

On November 16 -- two days after the Gaza operation began -- a car was torched in the northern West Bank. Earlier in the month the tyres of six cars in Shuafat were slashed and "price tag" slogans were daubed on some of them.

Despite the rising number of arson attacks, police say they are often unable to press charges given the lack of evidence.