The Islamic State group claimed a stabbing Friday that killed one person and wounded two others in the Australian city of Melbourne, its propaganda channel said.
Police shot a man who threatened officers with a knife and he is in a critical condition in hospital, Victoria Police Superintendent David Clayton said.
Clayton said there is no known link to terrorism, but stressed the investigation is still in its early stages.
Speaking at a news conference, Chief Commissioner Graham Ashton said that the suspect had "family associations that were well known" to police and that he had been known to Australia's security agency.
It has now been confirmed one person has died.
Members of the public who witnessed the event and wish to make a statement are asked to attend Melbourne West Police Station at 313 Spencer Street, Melbourne.
"We thank our police, those who came to assist them", he said. He has been arrested and taken to hospital in a critical condition.
Vision from the scene shows a man lunging at police officers with a knife.
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The unnamed man drove a 4X4 truck loaded with gas bottles into the bustling city centre of Melbourne, ignited the vehicle in a ball of flames and then attacked passers-by with a knife, police said. The exact circumstances are yet to be determined at this stage.
More than 100 police swarmed on the area.
A second person suffered a head injury and has been taken to hospital.
Images from the scene show a large white sheet covering a section of the road near what appears to be blood.
"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".
Melbourne resident Meegan May tweeted: "Chaos in Bourkest as a guy seems to have set his vehicle on fire then attacking police with a knife.
The area has been cordoned off", police said.
Nearby police arrived shortly at the location and the man, wielding a knife, attempted to assault police officers.