A knife-wielding man stabbed two people, one fatally, in Australia's second-largest city on Friday in an attack likely linked to terrorism, police said.
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.
"Three people have been stabbed, unfortunately one of them is deceased at the scene", he said.
"We are now treating this as a terrorism event", said Ashton, adding that the suspect is "someone that is known to us".
Dramatic footage captured from the scene shows officers try to apprehend the man following his stabbing attack. He was taken into custody in a critical condition.
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Footage on social media shows a blue ute up in flames and a man dressed in a black tunic and white trousers menacing police with what appears to be a knife.
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.
However, the exact reason for the stabbing and burning of the auto has not been ascertained as of yet.
"He got out of the vehicle, engaged with some members of the public at that location".
The man stabbed three people, killing one, before he was shot by police.
After crashing and setting fire to his vehicle, he was able to murder Sisto Malaspina, the co-owner of the famous Melbourne restaurant, Pellegrini's Espresso Bar.
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This would have created panic in the CBD before he would die at the hands of the police.
Australian police on Friday said they were treating a deadly knife attack in Melbourne as an an act of terror, with the Islamic State group claiming responsibility. "Australians will never be intimidated by these appalling attacks".
Victoria state premier Daniel Andrews said the attack was "an evil and terrifying thing that has happened in our city and state today".
"Then I heard a loud bang and someone said they could see someone doing chest compressions on someone as an ambulance started coming up the street as well".
Memories remain fresh of a fatal but not terror-related attack on the same street past year, in which a man drove his vehicle at pedestrians at high speed, killing six people and wounding about 30.
Two people, apparently members of the public, came to the aid of police, one using a shopping trolley and another using a chair to try and stop the attacker.
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