Munawar Hussain (58) wounded the shop manager in the neck and chased her through the store in St James Street before he then turned his attentions to a customer.
The defendant stabbed the customer in the arm and tried to land a blow in her back as she lay on the floor but 'mercifully' the blade of his kitchen knife snapped from the handle after it became stuck in her handbag strap.
Hussain fled and was detained outside by a store security guard and members of the public before police arrived on the morning of December 2nd, 2020, Manchester Crown Court heard.
Following his arrest, a note, written in Urdu, was discovered on him which read: "'O Israel, you are inflicting atrocities on Palestinians and Marks Spencer helping you financially."
Alex Leach QC, prosecuting, said the defendant earlier walked to the store from his home in Murray Street, Burnley, and launched his attack just moments after he entered and asked to speak to a manager.
He said it became apparent to police officers he had a history of mental health problems but doctors later deemed him fit to answer questions the following March.
Mr Leach said: "He told the police that he had targeted Marks and Spencer deliberately because he believed Marks and Spencer funded Israel in what he described as its persecution of Palestine.
"He said that had his knife not broken he would have gone on to kill others. He said that he expected that the police might kill him and he intended to be a martyr."
The store manager suffered a collapsed lung and nerve damage from the blow which passed near to her jugular vein.
She told police her assailant was wearing a covid mask and recalled his eyes 'looked pure evil.'
She said: "If I had fallen he would have killed me. I just thought ' he is not having me, I've got three kids and he is not taking me away from my kids.'
"I'm lucky to be here."
Jurors were told Hussain does not dispute stabbing the women and the issue for them to decide was what his intention was at the time.
Judge Nicholas Dean QC, the Honorary Recorder of Manchester, told them: "The prosecution say that Mr Hussain had a terrorist motive for his actions. Even if you are sure he had such motivation it does not necessarily follow he had an intent to kill."
The Crown submit it was 'overwhelmingly clear' from the evidence that Hussain had such intentions.
Hussain denies the attempted murder of the manager and a customer. He has also pleaded not guilty to two alternative counts of wounding with intent.
The trial continues today.