One killed in Melbourne knife rampage terror attack

One dead after man sets car set alight, stabs pedestrians in Melbourne

The driver of a pickup truck loaded with gas canisters stabbed three people in a Melbourne street on Friday, killing one of them in what Australian police are treating as an act of terrorism.

Moments after a van went up in flames at 4.20pm on Friday, police shot the man as he swiped at officers with a knife.

Victoria State Police Chief Commissioner Graham Ashton told a press conference that the male assailant stabbed three men before one of the responding police officers shot him once in the chest at the scene.

Khalif stabbed three men, with a man in his 60s dying at the scene and two others recovering in Royal Melbourne Hospital.

"He is certainly someone who is known to both us and the federal authorities in relation to counterterrorism and terrorism-related matters", he told Channel 7's Sunrise programme.

One of the officers shot him in the chest, Ashton said.

The area has been cordoned off and people have been asked to avoid the area.

Officers were initially called to reports of a auto fire near Bourke Street, a busy thoroughfare, at about 4.20pm local time. He was taken into custody in a critical condition.

They had initially thought the man was running to catch a tram close by, before a nearby police auto rushed to the scene.

Victoria state police said counter-terrorism investigators were searching two properties in suburban Melbourne on Saturday morning in connection with the attack, but there was no immediate word on what the searches yielded.

"There was a guy stabbed and there was a auto explosion in Bourke Street", he said.

The perpetrator, Hassan Khalif Shire Ali, 30, had his passport cancelled in 2015 after it was learned that he planned to travel to Syria, police said.

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

"They're all very angry ... because it brings a bad impact to the community", he said. "Australians will never be intimidated by these appalling attacks".

As investigations into the attack continue, Victorian Premier Daniel Andrews is urging people to show up en masse for Armistice Day events.

Markel Villasin, 22, was finishing his shift at KFC on Bourke St as the drama unfolded. It is unknown whether it came from the vehicle or was police gun fire.

"We take this opportunity to thank those very fearless and dedicated members of Victoria Police who did all of us proud in their very quick response in very unsafe circumstances", Andrews said.

The bystander said that other people had run and hid.

"Trolley Man, the hero Australia needs", one woman said on Twitter shortly after a series of videos of the attack began to circulate online.

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