A knife-wielding attacker who killed one person and wounded two others before being shot dead by police in Australia’s second-largest city had links to Islamic State and the assault is being treated as a terrorist attack, authorities said.
The suspect, who died in the hospital shortly after the assault in Melbourne on Friday, was identified by police as 30-year-old Hassan Khalif Shire Ali. Police said he and his relatives were previously known to the authorities. Chief Commissioner Graham Ashton, who leads the state police in Melbourne, said the man came to Australia decades ago and didn’t dispute a reporter’s assertion in a press conference that he came from Somalia.
Authorities said Saturday that Shire Ali’s passport was canceled in 2015 as he planned to travel to Syria, where Islamic State militants until recently controlled large parts of the country in a so-called caliphate. Shire Ali held radical views but it was determined he didn’t pose a national-security threat, authorities said.
The attack is a reality check, said Ian McCartney, acting deputy commissioner for national security at the Australian Federal Police. “Even with the fall of the caliphate in the conflict zone, the threat continues to be real.”
Mr. McCartney said the attacker had been inspired and radicalized by Islamic State. The police also said they are executing search warrants at two addresses in Melbourne’s suburbs on Saturday morning.
The attack began shortly after 4 p.m., when the man parked a vehicle in a busy shopping area in the city’s downtown district. A fire began in the vehicle and Mr. Ashton said the assailant “engaged” with passersby before police arrived about a minute later.
Footage published by the Australian Broadcasting Corp. showed a man lunging at and slashing officers with what appeared to be a knife, while a vehicle was on fire nearby. Mr. Ashton said firefighters later discovered there were gas canisters in the vehicle. Some witnesses said they heard two explosions come from the vehicle, a pickup truck according to video from the scene.
Vehicles have been used in terrorist attacks in recent years, including in Barcelona, London, New York and Nice, France. Melbourne has installed barriers recently to help shield sidewalks from potential attacks.
The assault shattered what is normally a festive time in Melbourne, which on Tuesday hosted the Melbourne Cup, a horse race so popular there is a public holiday in the city on the day it is held each year. The city was also gearing up for Christmas-related celebrations.
Charmaine Pisevski, 20, was shopping for clothes with her mother in a store when customers heard an explosion. When they evacuated to the street, Ms. Pisevski said they were about 20 feet away from the vehicle, which was engulfed in flames. She saw a man swinging at police, acting erratically and yelling.
The man “seemed to be not in the right state of mind,” she said. “I couldn’t make out what he was saying. You had the fire going. Everyone was panicking.”
Ms. Pisevski said she eventually heard two gunshots. The police said the man, whose record included cannabis use, theft and driving offenses, was shot in the chest.
Melbourne has been hit by other acts of violence in the recent past. In December last year, an Australian man of Afghan origin plowed a car into a crowd of people, injuring more than a dozen; one victim later died. That took place just blocks away from where Friday’s events unfolded. Police at the time said it wasn’t likely the December incident was terrorism-related.
In January 2017, another man drove a car through Melbourne’s downtown and killed six people. The ABC reported that man was considered to be in a drug-induced psychosis and the attack wasn’t considered terrorism-related. He is on trial this week.
Write to Mike Cherney at mike.cherney@wsj.com
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