Senator Pauline Hanson has demanded a halt on Muslim immigration after a man allegedly screamed 'Allahu Akbar' when he fatally stabbed a British backpacker.

The One Nation leader weighed in on the latest attack after Smail Ayad allegedly killed Mia Ayliffe-Chung, 21, in a bloody rampage at a backpacker hostel.

Police alleged the knife-wielding killer shouted 'Allahu Akbar' when he butchered the young woman and left another British man Tom Jackon, 30, fighting for his life.

The outspoken politician said she felt 'disgusted to hear yet another fatal, suspected terror attack in Australia that already has a link to Islamic extremism'.

'The attack in Home Hill, south of Townsville on Tuesday night could well be the first Islamic terrorist attack in Queensland and I want some answers,' Ms Hanson said.

Scroll down for video

Senator Pauline Hanson (pictured) has demanded a halt on Muslim immigration after a man allegedly screamed 'Allahu Akbar' when he fatally stabbed a British backpacker

British backpacker Mia Ayliffe-Chung (right) was 'living her dream' on a gap year in Australia when she was allegedly stabbed to death by Frenchman Smail Ayad (left) at a hostel

'I'm not going to be silenced on yet another attack involving Islamic extremism – especially one occurring in the state I'm representing in the senate.

'Let's be very open in calling out any religious motivation i.e Islamic extremism, in this attack.'

On Tuesday, Queensland Police Service Deputy Commissioner Steve Gollschewski confirmed investigators would look into the matter of extremist motives, mental health issues or drug use following the tragic death of the backpacker.

But Senator Hanson believes police are trying to downplay any possible terrorism links as she used the attack to repeat her controversial call for a moratorium on allowing Muslims to immigrate to Australia.

'These violent incidents in the name of Allah clearly show we need a moratorium on Muslim immigration,' she said.

'Our own government and Commonwealth have signalled a bright yellow warning to Australians of a probable threat of terrorism on home soil.

'That threat now appears to have become a reality.'

The outspoken politician said she felt 'disgusted to hear yet another fatal, suspected terror attack in Australia that already has a link to Islamic extremism'

Her comments comes on the heels of Maverick Queensland MP Bob Katter who said 'the time has come' to stop people from the Middle East and North Africa coming to Australia.

'The time has come now to stop people from those countries coming to Australia,' Mr Katter told Sky News.

He said even strict Islamic nations Saudi Arabia and Dubai had banned immigrants from North Africa, and Australia should follow suit.

'I think that the risks to the Australian people now are so great that that should not occur anymore,' Mr Katter said.

Maverick Queensland MP Bob Katter has called for a ban on people from the Middle East and North Africa coming to Australia

Mr Katter said people fleeing to Europe has led to a mass murder attempted every six days as he feared the same happening in Australia.

'It seems to me that we're having a mass murder or an attempted mass murder every three weeks in Australia,' he said.