Australian PM says 9 foreigners among those hurt when driver ploughs into crowd

Police allege that the 32-year-old Australian man, a refugee from Afghanistan, had a history of mental illness and drove a car into Christmas shoppers on one of the busiest roads in Australia's second-largest city on Thursday.

The incident was a chilling reminder of attacks using vehicles in cities around the world. Four people were killed in a similar incident in Melbourne in January.

Turnbull and police said the driver had no known ties to extremist organisations, although they also said he had spoken of the perceived mistreatment of Muslims after his arrest.

Police have yet to interview, charge or identify the man.

Turnbull said nine of the victims were foreign nationals. He did not specify their nationalities but Australian media reported they included people from China, India, Ireland, Italy, New Zealand, South Korea and Venezuela.

"This is a shocking incident to occur just on the eve of Christmas but we will not be cowed by it," Turnbull told reporters in Sydney.

Four people were killed and more than 20 injured in January when a man deliberately drove into pedestrians just a few hundred metres away from Thursday's attack. That was also not designated as a terror attack.

Police had cordoned off the area immediately after the incident but roads in central Melbourne were open and trams were operating as usual on Friday morning.

Reuters witnesses reported a heavy police presence around exits from nearby Flinders Street train station, with trauma support and Red Cross workers in the area. Department store staff said foot traffic was down from the day before.

"It's definitely quieter," said a saleswoman at a beauty counter in the David Jones department store, who declined to give her name.

"More people are coming in from the back entrance. I think they're trying to avoid Flinders Street Station," she said.

Workers at Walker's Doughnuts, which overlooks the site of the incident, said business was normal.

"We thought it would be less, but we're very busy," said store worker Bindu Kaki.

Police vehicles lined the streets and volunteers for the Victorian Council of Churches in Australia stood in high- visibility shirts with labels reading "personal support".

Community group the Ahmadiyya Muslim Community of Victoria issued a statement denouncing the incident and offering to donate blood to victims.

"As Australian Muslims it is not just a moral but also a religious duty to condemn in the strongest possible terms (the) horrific and senseless act of violence," it said.

Police said a second man arrested at the scene was released and was expected to be charged with possession of cannabis and a controlled weapon, although those offences were not linked to the car incident.