Australia's Turnbull says Melbourne siege 'a terrorist attack'

Police were called a short time later and Khayre was killed in a dramatic shootout with heavily armed officers.

Regarding the ISIS claim the gunman was a "soldier" of the group, Ashton was again sceptical.

Prime Minister Malcolm Turnbull has been strong in his response.

He forced her to call Channel Seven news in Melbourne during the stand-off with police, then said: "This is for IS (Islamic State)".

Police were called Monday after an explosion was reported in the Bay Street apartment complex in Brighton.

He said it was possible that Khayre may have been attempting to lure police by taking the escort - reportedly a sex worker - hostage.

Three police officers also sustained non-life threatening injuries during the siege. He cut off his Global Positioning System bracelet after the hostage situation began.

Court documents show Khayre migrated as a child with his family to Australia through a Kenyan refugee camp.

Australia's Prime Minister yesterday vowed to change state laws so that risky criminals are not released from prison early on parole, following a deadly siege by a paroled gunman that the authorities said was an "act of terrorism".

Turnbull described the incident as a "shocking and cowardly crime" and questioned why a man with a history of violent offences had been released on parole.

Amaq said the attack was launched because of Australia's membership of a USA -led coalition fighting against the militants in Syria and Iraq. But it was too early to know if the gunman set out to target police or "seized the opportunity he thought was presented to him last evening", Mr Ashton said.

Tightening the parole system will be high on the agenda at a meeting of the prime minister and premiers on Friday after the Melbourne terrorist siege.

Police move evidence as they search the home of Yacqub Khayre at Roxburgh Park, Melbourne, Australia, 06 June 2017.

According to Australian media, he was also known to counter-terrorism authorities for his alleged involvement in a 2009 terror plot to attack the army barracks in Sydney.

He noted Khayre had been acquitted of the NSW charges.

Prosecutors unsuccessfully argued that Khayre travelled to Somalia to obtain a religious ruling, in support of the Sydney plot.

Yesterday afternoon, the Seven Network took a phone call in its Melbourne newsroom from a woman who said she was in a hostage situation before man came on the line saying: "This is for IS, this is for al-Qaeda".

Police said Khayre booked an appointment on Monday with an escort in an apartment building in Brighton and arrived carrying a sawed-off shotgun, sparking a 2-hour siege. The woman taken hostage was unharmed.

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

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