Hostages held in siege in Martin Place, Sydney in lockdown
Hostages are being forced to hold an Islamic flag against the window of the Lindt Chocolat Cafe in Martin Place after at least one gunman stormed the premises.
About 20 staff and customers are being held at gunpoint inside the cafe.
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A number of people could be seen through the windows with their hands held in the air.
Police confirmed an operation was under way at the shop in Martin Place.
A NSW Police spokeswoman said officers were called to the shop about 9.45am on Monday. She urged people to stay away from Martin Place.
A woman is believed to have raised the alarm at 9.44am when she saw a man outside the cafe carrying a blue sports bag with a gun inside.
There are reports that there could be two gunman inside the cafe, although police have not confirmed this.
The cafe is right in the middle of the banking and retail district, and is usually packed with Christmas shoppers at this time of year.
The Channel Seven newsroom, which faces Martin Place, has been evacuated, along with the Macquarie Bank and Westpac offices in the area.
The Martin Place studio is Seven's main newsroom and home to breakfast show Sunrise and The Morning Show, which was on air when news of the siege broke about 9.45am.
The network was originally running a live-stream of the siege, but was asked to take it down for security reasons.
It is unknown if any Seven staff are among the hostages.
State Parliament, which is one block away from the cafe, has also been closed to the public, while David Jones's flagship store in the city was also being evacuated.
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Terrified customers in the cafe could be seen holding an Islamic flag - which is black with white writing on it - up against the glass window. The flag appears to be a Shahada flag, not an Islamic State flag, but is associated with Islamist and jihadist movements.
Trains between Central and Bondi Junction were initially stopped, but the Transport Management Centre said services resumed about 10.45am. However trains will not stop at Martin Place.
Journalist Chris Kenny, who was in the shop about 20 minutes 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 said.
"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."
A man who gave his name only as Bruno said he'd worked in the cafe for six months.
"I was supposed to start at 10am," he said while visibly shaken.
That was about 15 minutes after the seige started and he was unable to get inside.
A spokesman for federal Transport Minister Warren Truss said: "The airspace over the Sydney CBD is not in shut down. There are choppers in the air and air traffic is being rerouted according. At this stage no impact on the air traffic network."
Broadcaster Ray Hadley was reporting on Monday that the gunman had told negotiators he wanted to talk to Prime Minister Tony Abbott live on radio. Police have not confirmed this.
In September this year, police conducted a series of major anti-terrorism raids across Sydney. Following those raids, police alleged Islamic extremists were planning to behead a person in Martin Place in Sydney's CBD.
Shortly after the siege began, the US Consulate sent an "emergency message" to its citizens warning them to stay away from Martin Place.
The message read: "U.S. citizens are strongly encouraged to review your personal security plan, remain aware of your surroundings including local events, and monitor local news stations for updates. Maintain a high level of vigilance and take appropriate steps to enhance your personal security."
Police clear Martin Place after gunman holds hostages at Lindt Chocolat Cafe
Gunman takes hostages in cafe in Sydney [at] | Daily Mail Online
A live feed;
Live: Hostages held in siege in Martin Place - ABC News (Australian Broadcasting Corporation)
Abbott to address media on Sydney siege
PRIME Minister Tony Abbott will hold a media conference in Canberra to discuss the Sydney CBD siege at 12.30pm (AEDT).
MR Abbott met with the national security committee of cabinet in Canberra as the siege unfolded around 10am.
Up to a dozen hostages are being held inside the Lindt cafe in Sydney's Martin Place where an Islamist flag is pressed up against one of its windows.
"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," Mr Abbott said.
Up to a dozen hostages are believed to being held by gunmen inside the Lindt cafe in Sydney's Martin Place with an Islamist flag pressed up against one of its windows.
Abbott to address media on Sydney siege