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A man stabbed three people in the Australian city of Melbourne on Friday (November 9), killing one, before being shot by police.

He later died in hospital.

Police said they had initially responded to a car on fire.

The bomb response unit has been called in and the streets closed to the public.

The police say they are treating the incident as terrorism.

Two videos obtained by Reuters show a car in flames on a street and emergency vehicles arriving.

"There's police everywhere.

This is insane," nearby resident Jack Lovel can be heard saying in one of the videos shot from his bedroom window.