One person was killed and two others got injured after a knife-wielding attacker went on an hour-long stabbing rampage in Melbourne on Friday, before being shot and captured by police.
Police warned people to avoid the area and dispatched the bomb squad to secure the area and examine the burning auto.
"Police shot the male in the chest".
Two officers got out of the auto and attempted to engage him.
"One person has been taken to hospital with a neck injury".
Melbourne resident Meegan May tweeted: "Chaos in Bourkest as a guy seems to have set his auto on fire then attacking police with a knife".
Clayton said that the public is still advised that the area remains closed as investigations are ongoing at the crime scene.
A tall man wearing a long black coat and holding a knife has already stabbed three people.
Three people have been stabbed, including the fatality.
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Two other victims have been taken to hospital with injuries.
Bystanders were yelling out, "just shoot him, just shoot him!" as officers tried to avoid being stabbed.
Victoria police declined to comment when contacted about Islamic State's claim. Police were investigating the incident in Melbourne as suspected terrorism, and they were re-evaluating security plans for upcoming public events.
"It's the center of Melbourne, where a lot of the transportation changes over.it's probably the busiest part of Melbourne and late on a Friday", said Meegan May who witnessed part incident from a nearby tram.
Clayton confirmed that police officers, clearly seen confronting a man in digital footage of the incident, are "okay".
Counter terrorism police have been notified and are investigating.
The deceased terrorist reportedly drove a vehicle into pedestrians outside a local mall, the auto later burst into flames "exploding" and several people were stabbed by the unidentified male, who is known to authorities and has links with known terror plotters according to the Herald Sun.
The area has since been cordoned off by the bomb squad.
The street where the auto caught fire is the same one when in January 2017 a fatal but not terror-related incident when a man plowed his vehicle in to pedestrians at a high speed, killing six people and woulding about 30.