Martin Place siege: Gunman takes hostages in Sydney cafe

Hostages hold up an Islamic flag at Lindt Cafe in Sydney's Martin Place.

THE centre of Sydney has been locked down as at least two gunmen have taken hostages in a Martin Place cafe and forced them to hold up Islamic flags in the window.

It is believed ARMED men are holding 40 to 50 people hostage at a cafe in Martin Place in Sydney.

At least two gunmen are believed to be in the cafe. A squad of heavily armed specialist police officers have gathered on the corner of Elizabeth Street and Martin Place.

Picture : Richard Dobson

There is also a black and white flag being held up in a window. It is believed to be the Black Standard, a jihadist flag.

Lindt Australia CEO Steve Loane told he believes there are 40 to 50 people inside the cafe, including customers and staff.

A 2GB spokesman confirmed to that sources had informed them that the gunman claimed there are devices all over the city and they wanted to speak to the Prime Minister live on radio.

Castlereagh Street is swarming with hundreds of shocked onlookers and media personnel.

All schools and government buildings in the city are in lockdown.

A number of senior level state government officials are holed up in their Martin Place offices, overlooking the siege below.

They are awaiting instructions from police. One government source said they could see the terrified faces of the hostages looking up at them.

The area was shut down and scores of police are surrounding the building after the alarm was raised about 9.45am.

The Opera House has been abandoned following the discovery of a suspicious package.

Police are investigating however it is not known if it is linked to the siege at Martin Place.

lindt-shop-hostagePolice have closed off Martin Place between Macquarie and Elizabeth Streets, and Martin Place train station has been cleared. Police have cordoned off the area to about 150m and a special police operations unit is outside the building.

Public transport between Central and Bondi Junction has been stopped.

Buses are diverting away from Elizabeth St and Hunter St.

Police are investigating reports of a suspicious package at the Opera House however they believe it is not related to the siege at Martin Place.

Police said they were receiving a host of reports all over Sydney from alarmed citizens.

There are various road closures in place and motorists are advised to stay away from the area.

In September Federal Police made a host of arrests after allegedly uncovering a plot to abduct a random Australian and execute them by beheading in a public place, possibly Martin Place and post the act on social media.