NEW YORK (AFP) - A 26-year-old terror suspect under FBI surveillance was shot dead outside a pharmacy in Boston on Tuesday after brandishing a knife at police and federal agents, officials said.

The FBI refused to comment on any possible allegations against Usaama Rahim, but police said he refused multiple orders to drop his military-style knife before being shot outside a CVS pharmacy store.

Boston Police Commissioner William Evans said the suspect was wanted "for terrorist-related information" but refused to comment on US media reports that he had been radicalised by extremists in Syria.

"We believed he was a threat," Evans said. "He was someone we were watching for quite a little time."

Boston police and the FBI said they approached Rahim for questioning at the scene. The FBI confirmed they had no warrant for his arrest and no intention to take him into custody.

Evans said police had video of the suspect "coming up" at officers while they were in retreat and said the suspect had been shot twice - once in the torso and once in the abdomen.

"Their lives were in danger when two officers discharge their weapons," Evans said, showing reporters a photograph of the sizable, black knife that he said the suspect brandished.

"Both the FBI and the Boston police did everything they could possibly do to get this individual to drop his knife," Evans said.

But Rahim's brother, imam and Islamic educator Ibrahim Rahim, said his younger brother was shot three times in the back by police as he waited for the bus to go to work.

"We understand the need 4 info, but ask that the press 2 give us time to grieve as a family," he wrote on his Twitter account. "Once we have had an opportunity to grieve, we will make a family statement."

US media reported that Rahim was of Middle Eastern descent. His older brother graduated from university in Medina, Saudi Arabia.

The special agent in charge of the FBI in Boston, Vincent Lisi, said the suspect had been under 24-hour surveillance by Boston and Massachusetts state police, and the Joint Terrorism Task Force.

"We considered him armed and dangerous," Lisi told reporters.

He refused to give any details about the possible terror investigation, but said there was no concern for public safety.

Lisi said law enforcement approached Rahim to "interview him and talk to him about his intentions and some other matters." "I'm not going to comment on what his plans were," he said.

The suspect was pronounced dead at hospital. His death is under investigation.

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