Police label shootout in Melbourne, Australia a terror attack

Loading Police collecting evidence on Tuesday which included a brown paper bag marked as containing a hardcover book in Arabic

Loading Police collecting evidence on Tuesday which included a brown paper bag marked as containing a hardcover book in Arabic

Though the woman, who Khayre had lured to the address by booking her services through an escort agency, was threatened and held against her will, Mr Ashton said police were investigating the possibility that the gunman's real target was the police he shot at.

Australian police on Monday shot dead the man who had taken the woman hostage and said they were investigating whether the incident was terror-related.

"This is a terrorist attack by a known criminal, a man who was only recently released on parole, is a shocking, cowardly crime", said Australian Prime Minister Malcolm Turnbull in the capital, Canberra.

Prime Minister Malcolm Turnbull said he would speak with state leaders on Friday about changing state laws so that risky criminals were not released from prison early on parole.

Ashton also said police were aware of an alleged claim of responsibility by the Islamic State militant group.

Police are searching Khayre's mother's home in Roxburgh Park, while the bomb squad is searching the Buckingham Serviced Apartments on Bay St in Brighton. A teenager killed a Sydney police officer in October 2015 in what was considered a "politically motivated" attack.

Islamic State said via its news agency, Amaq, that the attack was launched because of Australia's membership in a USA -led coalition against the militant group.

Three police employees suffered injuries during the incidents but they were not life-threatening, police said, without elaborating. Khayre was acquitted of a plot to attack Sydney's Holsworthy Barracks in 2009.

"What is clear here is that we face a growing threat from Islamist terrorism in Australia in our region and around the world", he said.

Predators goalie Rinne struggling as Pens take 2-0 lead
Guentzel tied it later in the period, planting his 5-foot-11 frame at the post, where he jabbed a backhand rebound to tie it. The 34-year-old spent the first three rounds of the playoffs helping carry Nashville to the Final for the first time.

'This bloke (Yacqub Khayre) was known.

Khayre, 29, called a broadcaster during the siege to say he was acting in the name of the Islamic State (IS) group.

The receptionist gunned down during the Brighton terror attack has been named by Prime Minister Malcolm Turnbull.

Victorian Premier Dan Andrews earlier on Tuesday said the gunman was - until the deadly attack - compliant with the terms of his parole, which was for offences unrelated to terrorism. The hostage was rescued unharmed.

It is understood Khayre was listed as a participant in the "community integrated support program" - a deradicalisation program run by the Islamic Council of Victoria and funded to take up to 22 people each year.

"I hung around for a while and I heard gunshots, about 10 shots, and we got told it was a hostage situation", local resident Will Reid told the Australian Broadcasting Corporation.

Mr Ashton said Khayre had been on parole since being released from prison in November and "there was nothing wrong with his parole until yesterday".

Mr Turnbull said Australia's official terror threat level would remain at "probable".

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