Australian police shoot dead 'known terror suspect'

SYDNEY - Police have shot dead a "known terror suspect" who stabbed two officers, a day after the Islamic State group called for Muslims to indiscriminately kill Australians, officials said Wednesday.

The 18-year-old was killed on Tuesday evening, having arrived at a police station on the outskirts of Melbourne after being asked to attend a "routine" interview.

He was met by two members of the Joint Counter Terrorism team, at which point he pulled out a knife and repeatedly stabbed both men before one of the officers fired a single shot that killed him, police said.

"I can advise that the person in question was a known terror suspect who was a person of interest to law enforcement and intelligence agencies," Justice Minister Michael Keenan said on Wednesday.

He added that the attack was unprovoked.

"The incident occurred during a police investigation and it appears that the shooting by the police officer was in self-defence."

Reports said the man had previously made threats against Australian Prime Minister Tony Abbott and had been seen with a flag of the Islamic State group. They also said his passport had been cancelled.

Keenan would not confirm this.

"The details of last night are still being investigated," said the minister, with the man's name and occupation also not revealed.

Both police officers were in a stable condition.

The attack followed IS militants on Monday releasing a statement urging the indiscriminate killing of citizens of all countries taking part in the US-led coalition against the jihadists. Australia was singled out, along with the United States, Canada and France.

Foreign Minister Julie Bishop said Canberra was treating the call as genuine, warning Australia was clearly a target of the extremist group which has declared a "caliphate" straddling Iraq and Syria.

Only last week, Australia carried out large-scale anti-terrorism raids in Sydney and Brisbane to disrupt an alleged plot by IS supporters to abduct and behead a member of the public.

The government believes up to 60 Australians are fighting alongside IS jihadists, while 20 have returned home and at least another 100 are actively working to support the movement at home.

Keenan said the public should not panic.

"Whilst this is a horrible incident we do need to remain calm and go about our daily lives," he said.

Australia has deployed 600 troops to the United Arab Emirates to join the international coalition gearing up for a campaign to eradicate the jihadists.

It has also sent eight RAAF F/A18 combat aircraft.

So far Australia has only been involved in dropping humanitarian and military aid to Iraqis under siege. It has repeatedly ruled out any intervention on the ground.