Australia police: Melbourne attacker also planned explosion

Policemen block members of the public from walking towards the Bourke Street mall in central Melbourne Australia on Nov 9 2018

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

"We are now treating this as a terrorist event", said Victoria Police Chief Commissioner Graham Ashton, who said the suspect was "someone that is known" to police through family connections. Shire Ali died in hospital.

The co-owner of iconic Melbourne cafe Pellegrini's Espresso Bar has been named as the man fatally stabbed in Friday's Bourke Street attack.

Speaking on the Today Show , he said Khalif's vehicle contained gas cylinders and it is believed he meant to cause an explosion.

The investigation is still in its early stages, but Ashton said police do not believe there is a "ongoing threat".

The suspect was known to both state police and federal intelligence authorities.

"Look, he is someone that was known to us but the information that we had through the night, we with working on, he wasn't somebody that we were actively monitoring to that we were actively monitoring to that level in relation to his activities, no".

Police said he was a 74-year-old man who worked in the city, but did not release his name. "When a firearm is the last resort, they're (police are) trained to shoot to kill, shoot to the body mass".

Friday's incident occurred in the same street where the accused driver James Gargasoulas allegedly drove down pedestrians during the lunchtime rush in January 2017.

However, blowhard ISIS propagandists frequently claim responsibility for attacks they have nothing to do with.

The bomb squad was called after the barbecue-style gas cylinders were found in the vehicle.

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"Australians will never be intimidated by these appalling attacks and we will continue to go about our lives and enjoy the freedoms that the terrorists detest", he said.

"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.

Video posted to social media showed chaotic scenes as bystanders scattered while the attacker fought with police and his victims lay bleeding on the footpath.

After the explosion, the man used a large knife to attack shoppers, injuring 3 of them.

"Because he was on his stomach, they turned him over to see if he's all right, he was still alive", Markel Villasin, told Australian Associated Press.

"This is an evil and terrifying thing that has happened", Victoria State Premier Daniel Andrews said.

Members of the public are asked to avoid the area on Bourke Street between Russell and Swanston Streets.

On Saturday morning, more than a dozen police were patrolling the street, including members of the Critical Response Team.

Police identified the man responsible for Friday's attack as 30-year-old Hassan Khalif Shire Ali and said he was radicalized and inspired by the militant group's propaganda. The driver is on trial.

In December 2014, a 17-hour siege in which a gunman took 18 people hostage in a Sydney cafe ended with two hostages dead and the assailant killed by police.

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