Melbourne stabbing being treated as terrorism

Man Shot By Police After Stabbing Two People During Incident In Bourke St

One person was killed and others treated for stab wounds after a truck caught on fire and a man started attacking people with a knife in Melbourne's business district Friday.

Members of the public have praised the "trolley man", who was seen twice attempting to ram the knife-wielding attacker with a shopping cart, shortly before police shot the offender in the chest.

Vision from the scene shows a man lunging at police officers with a knife.

Three men were stabbed by the suspect and one of them died at the scene.

"We are now treating this as a terrorism event", said Victoria Police Chief Commissioner Graham Ashton, adding that the suspect is "someone that is known to us" and had been travelling in a 4×4 packed with gas bottles.

Once at the scene police say the man who emerged from the vehicle attacked officers, before members of the public alerted them to several people who had been stabbed.

The area is cordoned off and people are asked to avoid the area. The militant group said in a statement released through its Aamaq media arm that the man was "one of Islamic State fighters" and carried out the attack in response to IS calls for attacks in countries that are part of the worldwide coalition fighting the militants in Syria and Iraq.

The officers ultimately fired a shot, causing the man to fall down. One had a head injury and the other suffered a neck injury, according to The Age.

However, a few people weren't impressed, saying his actions could have made things more hard for the police who were trying to apprehend him.

However, the police has clearly refuted any links of terrorism with the incident. Police are not looking for anyone further at this early stage.

The driver then got out and began stabbing pedestrians in a terrifying frenzy, injuring two and killing one, police say.

The assailant had just stabbed three people and was trying to escape police at the time.

Police then "shot the male in the chest and he is now in a critical condition, under guard at hospital", Clayton said.

It has now been confirmed one person has died. They said they heard screams and cries from the crowd before they were rushed from the area.

Police initially responded to reports of a vehicle on fire at the corner of Bourke and Swanston streets.

"It's so chaotic", witness Sarah told 2GB's sister station 3AW in Melbourne.