'Terrorist' on stabbing rampage shot dead in Melbourne

'Terrorist' on stabbing rampage shot dead in Melbourne

'Terrorist' on stabbing rampage shot dead in Melbourne

Law enforcement officers responding to a auto fire in the city's central business district were "confronted by a male brandishing a knife and threatening them", Victoria police superintendent David Clayton told reporters Friday.

Commissioner Ashton did not name the man who lunged at police with a knife before he was shot by police and later died at the Royal Melbourne Hospital.

"We don't believe there is an ongoing threat at this stage, but certainly we are treating it as a terrorism incident".

An explosion is heard on Bourke Street at 4:10pm.

The two wounded stabbing victims were in the hospital.

At least two members of the public bravely stepped in to help police.

"Police are not looking for anyone further at this early stage", police said in a statement. Clayton said police shot the man in the chest and he was in critical condition.

Video posted online and on our Facebook page shows the suspect, who appears to be a black male wielding a knife and attacking a two of police officers as courageous members of the public try to "bring him down" with a trolly and a chair.

Clayton confirmed that police officers, clearly seen confronting a man in digital footage of the incident, are "okay".

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As the attacker pursues police across the street and they back away, the man recovers his trolley and follows.

Police said the driver got out of the vehicle, which then caught fire, and attacked three bystanders with a knife before being fatally shot by police.

'Me and the managers ran out and that's when we saw the auto on fire and then we saw the guy on the floor and we wanted to help, there were two blokes helping him out already, he was face down pools of blood around his face, ' he told AAP.

The bomb response unit is on the scene, conducting safety checks on the vehicle.

Australian police said the unnamed assailant was said to reside in Melbourne's northwestern suburbs, but had come to Australia from Somalia in or around the 1990s, when the country was ravaged by a civil war.

"This is an evil and terrifying thing that has happened", Victoria State Premier Daniel Andrews said alongside Ashton.

More than 100 police have swarmed on the area.

'I heard a loud bang, I ran outside and saw everyone was running the other way, ' he told the Herald Sun.

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