Hostages inside Sydney Lindt cafe, IS flag on window

Sydney, Australia: Hostages have been held inside a cafe in central Sydney on Monday with an Islamic flag displayed against a window, according to witnesses and reports, while police said they were also responding to an "incident" at the nearby Opera House.

Martin Place in the central business district was shut down as scores of armed police surrounded the Lindt chocolate cafe, with TV pictures showing a flag -- black with white Arabic writing -- held to a window by terrified customers.

Middle-aged man wearing black bandana seen directing hostages in #martinplace siege situation. http://t.co/f8dSKip6Ex pic.twitter.com/LjsLGtr0Pa

— 7 News Sydney (@7NewsSydney) December 15, 2014

Reports say as many as 40 people are in the cafe and that there is at least one gunman, although police had no immediate comment, only confirming that an operation was underway.

One armed man is holding an undisclosed number of hostages in a siege in Sydney, police said on Monday, adding that it was yet to be deemed a terrorism event.

"I can confirm for you that we have an armed defender in the premises holding an undisclosed number of hostages in the city, in the Martin Place area," New South Wales state police commissioner Andrew Scipione told a press conference.

Witnesses reported hearing loud bangs that sounded like gun shots.

Here are the highlights -

• Australia based Channel 7 news channel reported that as police prepare to swoop, two hostages and an employee have escaped and are hiding behind police.
• Lindt Cafe's statement on the siege

The following statement was posted on Lindt Cafe's Facebook page: "We would like to thank everyone for their thoughts and kind support over the current situation at the Lindt Chocolate Cafe at Martin Place. We are deeply concerned over this serious incident and our thoughts and prayers are with the staff and customers involved and all their friends and families. The matter is being dealt with by the authorities and we are waiting for any updates from them."

• Indian consulate in Sydney closed down as a precautionary measure.
• Offices in Sydney being evacuated.
• PM Modi tweets ‘Sydney incident disturbing’.

The incident in Sydney is disturbing. Such acts are inhuman & deeply unfortunate. I pray for everyone's safety.

— Narendra Modi (@narendramodi) December 15, 2014

• US Consulate near hostage cafe evacuated, security warning issued.

The consulate has also issued an emergency warning to US citizens in Sydney, urging them to "maintain a high level of vigilance and take appropriate steps to enhance your personal security".

• Major landmarks in the city, including Sydney Opera house, evacuated.
• Police briefing on hostage situation.

Police, public being tested but we'll face it head on.

Doing all possible that needs to be done.

Transport - ask people to avoid Martin Place.

Public asked to stay aware, vigilant and patient.

Can confirm that an armed offender holding unknown number of hostages.

Continuing to secure and make sure we can bring about peaceful outcome.

Tight restrictions, control around area.

Officers there are well-trained, professional, striving for positive outcome.

Police responding to 'incident' at Sydney Opera House.

Australian authorities are dealing with an "incident" at Sydney's Opera House, police said on Monday, without elaborating on whether it was related to an ongoing siege at a nearby cafe. Reports said the Opera House had been evacuated.

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."

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.

Martin Place is the finance centre of the city and houses several prominent buildings, including New South Wales state leader Mike Baird's office, the Reserve Bank of Australia, Westpac Bank and the Commonwealth Bank.

Authorities said they were also dealing with an "incident" at the nearby Sydney Opera House, although police did not say whether it was related to the ongoing siege.

"The police are responding to an incident at the Opera House," a New South Wales police spokeswoman told AFP, adding that no further details were available.

Reports said the Opera House had been evacuated.

NATIONAL SECURITY RESPONSE

Prime Minister Tony Abbott convened a national security meeting to deal with the unfolding drama.

"This is obviously a deeply concerning incident but all Australians should be reassured that our law enforcement and security agencies are well trained and equipped and are responding in a thorough and professional manner," he said.

The incidents came just minutes before police announced a man had been arrested in Sydney on alleged terrorism offences as part of ongoing investigations into plans for an attack on Australian soil.

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".

It was not clear if the matters were related.

More than 70 Australians are currently 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.

"I did speak to a couple of people who saw a bit more of this unfold than I did," he told the newspaper he works for, The Australian.

"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.

"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."