Sydney siege: Hostages held in Lindt cafe
Jon Donnison: Footage showed people fleeing the building
A gunman is holding staff and customers hostage at a cafe in Sydney, Australia.
The Lindt cafe in the city centre is surrounded by armed police. Officers have made contact with the gunman.
Five people have been seen running from the building. It is not clear how many remain inside. A black Islamic flag has been displayed at the window.
Prime Minister Tony Abbott said it was "profoundly shocking" that people were being "held hostage by an armed person claiming political motivation".
He was speaking after chairing a meeting of the national security committee in Canberra.
Earlier Mr Abbott said: "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."
Eyewitness Andrea Proctor: "Many police officers started to come around us"
Senior police officers say they are on a footing "consistent with a terrorist event".
The incident began as people were arriving for work in Martin Place on Monday. Witnesses saw a man with a bag and gun walk into the Lindt chocolate shop and cafe.
Lindt said about 10 employees and 30 customers were thought to be inside at the time. Nearby offices were evacuated and police asked people to remain indoors and away from open windows.
The BBC's Jon Donnison in Sydney says an enormous police operation is in place, on a scale few Sydney residents will have seen.
It is not clear whether the five who ran away from the cafe fled or were released
About six hours into the siege, three people were seen running from the building housing the cafe. Two more people followed about an hour later. It is not clear whether they escaped or were released.
New South Wales Police deputy commissioner Catherine Burn said: "Those people are now being assessed to make sure their health is okay and then police will talk to them."
"Our approach is to resolve this peacefully. It might take a bit of time but that is our priority," she added.
Police negotiators were in contact with the gunman, Ms Burn confirmed. The suspect also contacted local media and reportedly issued demands.
Channel 7, a broadcaster with offices facing the cafe, said lights inside the premises were turned out as night began to fall.
Eyewitness
Siouxsie Ford, a partner at a law firm, is inside her office near Martin Place, which has been locked down by police.
She told the BBC: "There's a large media presence around the security perimeter, an ambulance, a fire truck and police cars.
"We are very concerned about what's going on inside the cafe. People in my office are watching out of the windows, or watching what's happening on TV.
"The building management has been broadcasting alerts. We were told the lifts and doors were locked. We haven't been told when exactly we can leave, but if there is a window of opportunity we can leave immediately and so we are on standby."
A man wearing a bandana and a backpack was seen inside the cafe
Hundreds of heavily armed police are surrounding the building
An armed man wearing a backpack and a bandana could be seeing walking around inside the cafe.
TV footage showed at least three people, thought to be employees and who were visibly distressed, holding up to the window a black flag bearing the declaration of Islamic faith, which reads: "There is no God but Allah, and Muhammad is his messenger."
The flag is similar to those used by jihadist groups, but is different from the one used by Islamic State militants in the Middle East.
Martin Place is home to the state premier's office and the headquarters of major banks.
In September, Australia - which has sent fighter jets to join the US-led coalition conducting air strikes against Islamic State in Iraq - carried out a big anti-terror raid linked to an alleged plot in September.
In October, new anti-terrorism laws, including a provision designed to stop Australians fighting in overseas conflicts, were approved by the Australian parliament.
- A black flag bearing the white Arabic text of the "shahada", the basic statement of the Islamic faith, is used by jihadist groups worldwide
- The statement says: "There is no God but Allah, and Muhammad is his messenger"
- A black flag was the battle flag of the Prophet Muhammad and was carried into battle by many of his companions
- Today, it is used as a symbol of engagement in jihad, in the sense of holy war, by militant groups including al-Qaeda and Islamic State
- Islamic State's banner - unlike the flag raised in the window of the coffee shop - bears the first part of the shahada and the seal of the Prophet below it.bbc
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