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Melbourne siege a ‘terrorist incident’

Melbourne siege a 'terrorist incident'

Police from the bomb squad unit walk near scene of the Melbourne siege Melbourne siege a 'terrorist incident'

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Police bomb experts arrive at the scene in Melbourne

Australian police are treating as a "terrorist incident" a Melbourne siege in which a gunman was killed.

Officers went to an address in a suburb of the city on Monday after reports of an explosion and found one man already dead in a stairwell.

Another man, now identified as Yacqub Khayre, was holding a woman inside the building against her will.

Khayre called a local broadcaster during the siege to say he was acting in the name of the Islamic State group.

A news outlet for the group said it had carried out the attack.

Three police officers suffered injuries after Khayre engaged them in a firefight in which he was shot dead. The hostage was rescued unharmed.

Gunman known to police

Victoria Police Chief Commissioner Graham Ashton said Khayre had been acquitted over a plan to attack a Sydney army barracks in 2009.

Khayre had "a long criminal history" and was on parole after being released from jail on a separate offence last year, Mr Ashton said.

The commissioner said there was no evidence that the gunman was acting on orders from overseas.

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"They always tend to jump up and claim responsibility every time something happens," Mr Ashton said.

"We do not yet know if this was something he was really planning or whether it was just an ad hoc decision that he has made just to go off tap like this."

Victorian Premier Daniel Andrews praised the efforts of police.

"What is beyond question in this incident and at all times is the professionalism, bravery, courage and effectiveness of our specialist police forces in this state," he said.

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