Two-year-old Zvi Ginzburg and his five-year-old sister Efrat were killed in a fire that broke out Tuesday evening on the fifth floor of a residential building on in Beitar Illit.
Seven other people were injured.
Four firefighting teams were called into the scene and a crane was brought from Jerusalem to help to bring the fire under control and rescue people trapped inside the building.
The building was evacuated and during the search, nine people with injuries were removed from the scene. Two were in critical condition and Magen David Adom paramedics declared them dead.
The paramedics evacuated three people who suffered smoke inhalation to the Shaare Zedek Hopsital in Jerusalem, including a man about 22 years of age in moderate condition and two children aged seven and nine with light injuries.
"The firefighters continue their search of the other apartments," a fire department spokeswoman said. "The building is still full of smoke, and at the same time another team is carrying out fire extinguishing operations at the site."