Victoria Police Commissioner David Clayton speaks to the media about the terrorist attack on Bourke Street on November 9 - Photo Reuters

In addition, last night, November 9, the Islamic State (IS) terrorist organization claimed responsibility for the incident through the Amaq media agency. This organization affirmed that "The perpetrator of the operation in Melbourne was an Islamic State gunman and carried out the above operation targeting citizens of the coalition" against IS.

Reuters reported that the suspect set fire to a car loaded with gas cylinders in downtown Melbourne yesterday afternoon and stabbed three people, killing one on the spot and sending two others to hospital.

The suspect then threatened the police officers with a knife. The police shot him in the chest and arrested the terrorist suspect. Fortunately, the gas cylinders did not explode and were extinguished within 10 minutes.

Victoria Police Commissioner Graham Ashton said the suspect died after being taken to hospital in a critical condition.

Mr. Ashton said all the victims were men, two of whom were 26 and 58 years old. Police Ashton declined to release the victims' identities because authorities were still in the process of contacting their next of kin.

Counter-terrorism police and intelligence officials are still working to determine how the attack was planned, but Australian intelligence knows the suspect, AFP reported.

"We do not believe there is a threat at this time but we are certainly treating this as a terrorist incident," Ashton said. He declined to provide any information about the knifeman who attacked several people on Bourke Street but said the 31-year-old suspect was Somali and belonged to a well-known group in the intelligence community.

Australian authorities are assessing the situation to arrange security for events taking place this weekend and according to Mr Ashton, police will increase forces in crowded places.