Gunman holds hostages in Sydney cafe, makes demands

A gunman took dozens of people hostage inside a Lindt chocolate shop and cafe in central Sydney on Monday. TV images revealed some of the hostages inside being forced to hold up a black flag similar to that of the "Islamic State" terror militia.

Three men were seen running out of the fire exit of the building, one shouting "don't shoot!" and taking shelter among the police. Two women also ran out shortly after, though it was unclear whether they escaped or were released.

Deputy Police Commissioner Catherine Burn told a press conference that Sydney police negotiators had established contact with the gunman about six hours after the event began. He demanded an "Islamic State" flag and to speak to Prime Minister Tony Abbott via radio. He also claimed to have two bombs inside the cafe, and two others elsewhere in Sydney's central business district.

"We have moved to a footing that would be consistent with a terrorist event," Police Commissioner Andrew Scipione told reporters, though he could not confirm that the incident is officially being labeled terrorism.

"We're dealing with a hostage situation with an armed offender and we are dealing with it accordingly," he said.

Dozens of heavily armed police surrounded the cafe in Martin Place, a central district that is home to the Reserve Bank of Australia, the state premier's office and two of Australia's largest banks. The New South Wales state parliament is only a few blocks away.

Steve Loane, Lindt Australia's chief executive, said there were "probably 30 customers" inside the cafe, along with 10 staff members. A police spokesperson later reduced this estimate, but did not give an exact number.

"We are at this stage continuing to secure and make sure that we are doing all we can to bring this to a peaceful outcome," Scipione said.

Australian Prime Minister Tony Abbott said it was unclear if the incident was politically motivated.

"We don't yet know if this is politically motivated, although there are some indications that it might be," Abbott told reporters in Canberra. "This is a very disturbing incident. I can understand the concerns and anxieties of the Australian people."

Abbott has convened Australia's National Security Committee for emergency briefings on the situation.

Police have cordoned off the area, evacuated nearby offices and told the public to stay clear. A police spokeswoman said no injuries had been reported as a result of the incident.

The United States has evacuated its Sydney consulate, which lies near the cafe, as a precaution.

The black flag displays the Muslim declaration of faith, the Shahada, the first of Islam's five pillars of faith.

The world-famous Sydney Opera House was evacuated earlier Monday after a suspicious package was discovered. It's unclear if the discovery of the package is related to the cafe hostage incident.

Australia recently launched nationwide counterterrorism raids against suspected radical Islamist sympathizers, resulting in numerous arrests in Sydney. Australian warplanes are also participating in combat missions against the "Islamic State" terror group in Syria and Iraq.

bw/cmk (AP, Reuters, AFP, dpa)