Australian police kill hostage-taking gunman in 'terrorist incident'

A possible terror incident on Monday left two men dead and three Australian police officers and a woman hostage injured in an apartment building here.

On Monday evening, 29-year-old Yacqub Khayre killed an apartment building receptionist and took a sex worker hostage, in an IS-claimed terror siege created to draw counter-terror police into danger.

An Australian policewoman directs traffic near emergency services vehicles near the site of where a gunman was shot dead after holding a woman hostage in Melbourne, Australia June 5, 2017.

Australian police said on Tuesday that a shootout in which two men died, three police officers were wounded and a female hostage was freed was being treated as a terror attack.

Australian police have said they are treating a deadly shooting and siege in Melbourne as a terrorist incident, after the self-styled Islamic State terrorist group said it was behind the attack.

Prime Minister Malcolm Turnbull said he would speak with state leaders on Friday about changing state laws so that unsafe criminals were not released from prison early on parole. "It is a terrorist attack and it underlines the need for us to be constantly vigilant", he said.

The state's chief police commissioner, Graham Ashton, said it was still not certain as to whether it was a planned attack.

The home the Melbourne siege gunman shared with his mother has been raided by police who at this stage believe he was acting alone.

Khayre was considered "a low-risk person of interest" by anti-terrorism authorities, and has sparked a debate over parole for terrorism-related violent offenders. He was recognised as a refugee under Australia's humanitarian migration program and later became an Australian citizen, police said.

But the prime minister, who has twice spoken with Andrews since the siege, highlighted comparisons to Lindt Cafe hostage-taken Man Monis as well as the killer of Melbourne woman Jill Meagher.

Victoria Police says hundreds of its officers, as well as federal police, are "making sure everything that's behind this" is going towards finding his motivation. He was previously charged with a terrorism plot that targeted Holsworthy army barracks in Sydney.

Prime Minister Malcolm Turnbull has been strong in his response.

Through its Amaq News Agency, the global terror group, Islamic State, identified the gunman as one of its fighters.

Khayre went to the foyer and shot Mr Hao before returning to his room, where he held the 36-year-old escort hostage.

The news outlet also disclosed that Amaq, the press arm of ISIS, claimed that "the attack was launched because of Australia's membership of a USA -led coalition fighting against the militants in Syria and Iraq".

  • Zachary Reyes