Australian police said they are now treating a deadly knife attack in Melbourne as an act of terror, adding that the suspect was originally from Somalia and was known to intelligence authorities.One person was stabbed to death, and the suspect was shot and arrested by police.

Victorian Police Superintendent David Clayton said a further two people had been stabbed and taken to hospital. Police said they had initially responded to a report of a car on fire.

The bomb response unit has been called in and the area, in the city centre, has been closed to the public.