Police in Australia say they are treating a shooting and two-hour siege in Melbourne as terrorism after Islamic State said it had inspired the attack.

Yacqub Khayre, 29, killed a man in the foyer of an apartment block in the beach suburb of Brighton on Monday evening.

He then took an escort girl hostage, calling police to say he would hurt her if they intervened.

Police attempted to negotiate with Khayre before he came out of the building shooting at police. He was thens hot dead by police.

The hostage escaped without injury but three police officers were injured in the shooting, although their wounds were not life-threatening.

Khayre, from Somalia, had made statements "around al Qaeda", also calling a local television station reportedly saying "This is for IS, this is for al Qaeda", police said.

Victoria Police chief commissioner Graham Ashton was sceptical of IS claims of responsibility, saying that the terrorist group "always tend to jump up and claim responsibility every time something happens".

He said: "We're not seeing anything indicating that he's got some message from overseas to do this at all but, again, early days.

"We've got material that's seized. We'll go through that and work it out."

Previous history

Khayre was acquitted of plotting a terror attack at a Sydney army base in 2010, police said.

Khayre had also served jail sentences for arson and violent crimes which were not related to terrorism. He was released on parole in November.

Australia's Prime Minister Malcolm Turnbull said he would speak with state leaders about changing state laws so that dangerous criminals were not released early on parole.

He said: "There have been too many cases of people on parole committing violent offences of this kind."

Australian authorities say they have prevented 12 attacks in the country since September 2014, charging more than 60 people with related crimes.