Three hostages run out of Sydney siege café

People standing behind a police cordon look towards Lindt cafe in Martin Place.  Video grab shows hands pressed up against the window of Sydney's Lindt cafe, where hostages are being held.  -Reuters

 AFP/Sydney

Three people ran out of a Sydney cafe where a gunman has taken hostages and displayed an Islamic flag against the window, police said on Monday, adding that no one has yet been harmed.

The hostages appeared to come out of a side door of the Lindt chocolate cafe which was being watched by heavily armed police, almost six hours after the standoff began.

"Three people have now emerged from the location in Martin Place," New South Wales police deputy commissioner Catherine Burn said, referring to the central business district location.

"The first thing we will do is make sure they are okay.

"We will work with these people to figure out more information. We do not have information to suggest that anyone is harmed at this stage."

Police said they did not have precise figures on how many hostages remained in the building but Burn said "it is not as high as 30" as some reports had suggested.

She added that police negotiators "have had contact and continue to have contact" with the person holding the hostages but they still did not know the motivation for the siege.

Hostages held inside Sydney cafe, Islamic flag held up

A gunman was holding terrified hostages inside a Sydney cafe Monday with an Islamic flag displayed at the window, triggering a lockdown in an area home to government and corporate headquarters.

A square in the heart of the city was evacuated as hundreds of armed police surrounded the Lindt chocolate cafe, where a flag -- black with white Arabic writing -- was held to a window by customers.

New South Wales state police commissioner Andrew Scipione said it was not clear how many hostages were being held by the "armed offender" with officers still unsure who they were dealing with.

"We have not yet confirmed this is a terrorism related event," he said.

Australia has been on high alert after the government raised concerns that citizens who have fought alongside jihadists in Iraq and Syria could return home radicalised and capable of carrying out attacks.

Prime Minister Tony Abbott convened a national security meeting to deal with the "disturbing" developments.

"We don't yet know the motivation of the perpetrator, we don't know whether this is politically motivated although obviously there are some indications that it could be," he said.

"The whole point of politically motivated violence is to scare people out of being themselves.

"Australia is a peaceful, open and generous society. Nothing should ever change that and that's why I would urge all Australians today to go about their business as usual," he added.

Reports said anywhere between a dozen and 50 people were in the cafe. Several were seen with their arms in the air.

US President Barack Obama has been briefed about the crisis, a White House official said.

Patrick Byrne, a producer at Channel Seven whose newsroom is opposite the cafe, said staff at the television station watched the situation unfold.

"We raced to the window and saw the shocking and chilling sight of people putting their hands up against the panes of glass at the cafe," he told the Australian Broadcasting Corporation.

"This was just extraordinary."

- National security response -

Martin Place is Sydney's financial centre and houses several prominent buildings, including the New South Wales parliament, the US consulate, the country's central bank and the Commonwealth Bank of Australia.

Many shops in the central business district opted to close early due to the scare, with only a trickle of people walking along usually bustling streets.

"It's sad to think this is my home and that it could happen anywhere," said onlooker Rebecca Courtney.

The incident came just minutes before police announced a man had been arrested in Sydney on alleged terrorism offences.

They said the 25-year-old was seized as part of "continuing investigations into the planning of a terrorist attack on Australian soil and the facilitation of travel of Australian citizens to Syria to engage in armed combat".

Scipione said he did not believe the matters were related.

The arrest comes after the government in September raised its terror threat level and police conducted large-scale counter-terror raids across the country. Only two people were charged despite 800 officers being involved in the operation.

More than 70 Australians are believed to be fighting for Islamic militants in Iraq and Syria. At least 20 have died and there are mounting concerns that increasing numbers of youths are being radicalised and could mount attacks at home.

Journalist Chris Kenny, who was in the Lindt cafe just before the siege began, said he understood the automatic glass sliding doors had been disabled.

"One woman said she tried to go into the shop just after I came out with my takeaway coffee but the doors wouldn't open," he told the newspaper he works for, The Australian.

"So obviously whoever is doing this has disabled the automatic glass sliding doors to stop anyone else going in and she said immediately she could see there was a weapon.

"She mentioned it being taken out of a blue bag and people were straight away asked to put up their hands."