The Victorian Premier, Chief Commissioner and the Grand Mufti of Australia have pleaded for calm as law enforcement agencies investigate the fatal shooting of Numan Haider and his involvement with the Al-Furqan Islamic Centre in Melbourne's south-east.

But concerns of reprisal attacks against the Muslim community were inflamed when Islamic Council of Victoria secretary Ghaith Krayem refused to condemn the actions of the Endeavour Hills teenager until a police investigation had been completed.

Mr Haider was shot after he repeatedly stabbed a 43-year-old Australian Federal Police officer and a 38-year-old member of Victoria Police when they met near the Endeavour Hills police station on Tuesday night.

A senior security source said Mr Haider had instigated the meeting outside the police station and had recently been in contact with members of Islamic State, also known as ISIL, in the Middle East along with radical elements of Melbourne's Islamic community.

Police investigators are believed to have discovered another large knife and an ISIL flag, amid claims by a senior police source that he planned to behead the officers and film the aftermath.

Mr Haider had been the subject of a three-month investigation by a joint anti-terrorism taskforce, after unfurling an Islamic flag at a Dandenong shopping centre and threatening the AFP and ASIO on social media.

A family friend of the Haiders told the ABC that his parents tried to stop their son leaving the house when he headed out to meet with police.

The ABC reports that the family wanted Haider to see a counsellor over his behavior, after police visited in May to discuss his radicalism. The parents had been looking into an arranged marriage as a way of getting him to settle down.

Most of the Haider's neighbours did not want to comment. The family lives in a neat double-storey brick house, like many on the street.

One neighbour said he had lived near the family for a long time, but only knew them well enough to say good morning to. He had not heard that Mr Haider had been involved in the incident at the police station a short drive from their street until he was told by Fairfax Media.

"Keep me out of it, I don't want to get involved," he said.

On Mr Haider's Facebook page, he had posted photographs of himself wearing military camouflage with an Islamic flag alongside abusive messages towards law enforcement agencies.

"Lets not put the focus on other things. The main message I'm sending with these statuses and photos is to the dogs AFP and ASIO who are declaring war on Islam and Muslims," Mr Haider posted.

Friends of Mr Haider have posted tributes on Facebook, with some lamenting that Muslims were being portrayed as terrorists.

One teenager posted an image of the Ku Klux Klan and Islamic State militants, contemplating why all Christians were not treated as racists when all Muslims were treated as terrorists.

"Rest in paradise beautiful boy," the same friend wrote.

"You're gone too early man <3 Numan.

"I know you're in a better place now. May Allah keep your family strong."

A joint investigation is working on the belief that Mr Haider acted alone, according to a senior security source.

The government cancelled Mr Haider's passport recently because officials had significant concerns that he wanted to travel to the Middle East to fight with the Islamic State.

While the attack happened just a day after the Islamic State issued a blanket call for followers to attack Australians in response to the planned military campaign in Iraq, authorities on Wednesday were not aware of any evidence that Mr Haider was following that directive.

It is believed taskforce officers had spoken with Mr Haider and his family in the past week about his increasingly erratic behaviour.

Chief Commissioner Ken Lay confirmed that Victoria was on a heightened state of alert, after writing to all members of Victoria Police and warning them to "exercise extreme caution".

"It is a dynamic and challenging security environment that we find ourselves in, dealing with new threats that stand so aggressively and at odds with everything we value and we stand for. But I would say this, police forces across the country are working together and as one with our Commonwealth agencies to keep our community safe," Mr Lay said.

Law enforcement agencies are expected to examine links between Mr Haider and the Al-Furqan Islamic Centre in Springvale South, which was the subject of a larger counter-terrorism operation by the AFP in 2012.

The centre's firebrand leader, Harun Mehicevic, also known as Abu Talha, declined to discuss Mr Haider's involvement with Al-Furqan, or his violent death.

Mr Mehicevic is well known to police and security agencies for extolling the virtues of jihad, while his centre was suspected of involvement in extremist activity in 2012, including fund-raising for rebel forces in Syria.

The raids led to the seizure of items including a computer memory stick containing "violent extremist materials", as well as imitation firearms and registered guns.

Premier Denis Napthine urged Melburnians to feel "confident" attending upcoming major events, including this weekend's grand final and the spring racing carnival.

Dr Napthine also expressed concern about a possible backlash against the Muslim community in Melbourne. "It's not about faith, it's not about ethnicity, it's about the alleged behaviour of an individual," Dr Napthine said.

"It is critical no particular group within the community is singled out or targeted and it's important Victorians remain calm and go about their business in their usual manner."

On Wednesday night, members of the Islamic community in Melbourne's south-east met with representatives Victoria Police to discuss Mr Haider's death.

South-east divisional superintendent commander Russell Barrett said police had been invited along to the meeting at the Islamic Education and Welfare Association of Dandenong in Narre Warren North.

Multicultural liaison officers were among those in attendance at the mosque, which Mr Haider is believed to have once frequented.

Commader Barrett said local police had a strong relationship with the Islamic community and wanted to make sure Muslims felt safe.

"Victoria Police will strongly support (the Islamic community) and will not tolerate racial vilification if they experience incidents of that," he said. "That's the most important message for us to convey tonight."

Mr Krayem said brandishing a flag and making disparaging comments about Australian agencies did not make a person a terrorist.

"While I don't know the young man personally, I do know many young men at that age and they can be brash, they can be angry, they can be immature," he said.  "None of those things make him a terrorist."

Mr Krayem urged the community and authorities to await the outcome of investigations into the tragedy before laying blame, saying he refused to condemn Mr Haider until "the complete truth" was known.

On Wednesday night, both injured police officers were in a serious, but stable condition. The AFP officer, who was critically injured with stab wounds to his head, neck and stomach, underwent surgery on Tuesday night.

The Victorian leading senior constable was slashed to an arm and had surgery on Wednesday.

Both men are believed to be parents of young children.

Victoria Police Deputy Commissioner Tim Cartwright asked all media agencies not to name either officer, amid concerns for the safety of their families.

With Craig Butt and Nino Bucci