Melbourne attack: Man shot dead after fire and fatal stabbing

A man who set a car on fire and stabbed three people - one fatally - in the Australian city of Melbourne has died in hospital after being shot by police.

Authorities now say they are treating the attack as terror-related.

The attacker, 31, was shot after confronting officers on a busy city street, authorities said. He was taken into custody in a critical condition.

The two survivors are in hospital, neither are in a serious condition. The suspect has not been named.

Police said they were "not looking for anyone further at this early stage".

"We don't believe there is an ongoing threat at this stage, but certainly we are treating it as a terrorism incident," said Victoria Police Chief Commissioner Graham Ashton.

He said the suspect, who is of Somali origin, was "someone that is known" to both local police and federal intelligence, adding it was "mainly in respect to relatives" who are "certainly persons of interest to us".

Footage from the scene showed police confronting the man

The Islamic State (IS) group said on Friday that one of its "fighters" was behind the attack, its Amaq news agency reported.

What happened in Melbourne?

Officers were initially called to reports of a car fire near Bourke Street, a busy thoroughfare, at about 16:20 local time (05:20 GMT), just before the evening rush hour.

Police later discovered that the vehicle was packed with "barbecue-style" gas cylinders. Footage circulating on social media shows the vehicle crashed into shop fronts, engulfed by flames.

However, the cylinders did not explode, police said.

"As they got out of the car, they were confronted by a male brandishing a knife and threatening them," Supt David Clayton said at a news conference.

The incident happened in the heart of Melbourne's business district

A burnt out vehicle was later seen on the same street

"At the same time, passers-by were calling out that members of the public had been stabbed."

Other footage shared on Twitter shows at least two police officers confronting the man, who is brandishing a large knife. At one point, what appears to be a member of the public tries to help, using a shopping trolley to push the assailant back.

Who were the victims?

None of the three men reportedly stabbed at the scene have been officially named.

However Tasmanian Premier Will Hodgman said on Twitter that local businessman Rod Patterson was among those attacked.

"A nicer bloke you wouldn't meet," Mr Hodgman tweeted. "It's not surprising he would step in to help others. We all wish him well."

According to Victoria Police, a 26-year-old and 58-year-old were both taken to hospital with non-life threatening injuries.

A police officer was also treated at the scene

Is this the first time Melbourne has been attacked?

No. This incident comes as a man is on trial for a 2017 attack on the same street which left six people dead and dozens wounded.

James Gargasoulas is accused of deliberately driving his car into pedestrians on Bourke Street, hitting 33 people.

His defence barrister has said he was in a drug-induced psychosis at the time.

Last year, Australian police also arrested a man they alleged was trying to carry out an attack in the city over New Year's Eve.