Sydney cafe siege: Hostages held by gunman, forced to hold Islamic flag

An armed assailant was holding an unknown number of hostages inside a central Sydney cafe on Monday, police said, with local television showing some being forced to hold up a black flag with white Arabic writing in the window.

This image taken from video shows people holding up what appeared to be a black flag with white Arabic writing on it, inside a cafe in Sydney, Australia Monday, Dec. 15, 2014. (Source: AP)

Prime Minister Tony Abbott, who has warned of militant plans to strike Australian targets, said there were indications the hostage situation at the Lindt Cafe was politically motivated. "This is a very disturbing incident. I can understand the concerns and anxieties of the Australian people," Abbott told reporters in Canberra, without providing any information on the unfolding siege.

This image taken from video shows people holding up hands inside a cafe in Sydney, Australia. (Source: AP)

Australia, a staunch ally of the United States and its escalating action against the Islamic State in Syria and Iraq, is on high alert for attacks by home-grown militants returning from fighting in the Middle East. Police had not had any direct contact with the hostage taker, said Andrew Scipione, police commissioner for the state of New South Wales.

A police officer runs across Martin Place near Lindt cafe, where hostages are being held, in central Sydney December 15, 2014. (Source: Reuters)

A Lindt Australia executive said there were about 10 staff working at the cafe, Sky Business television reported.

A man is seen standing behind the window of the Lindt cafe, where hostages are being held, in this still image taken from video from Australia's Seven Network on December 15, 2014. (Source: Reuters/Reuters TV via Seven Network/Courtesy Seven Network)

Chief Executive Steve Loane also said there were "probably 30 customers" in the cafe, according to Sky Business, although he stressed to another news outlet that he was guessing.

Police evacuate people from an office building close to a cafe under siege at Martin Place in the central business district of Sydney, Australia, Monday, Dec. 15, 2014. (Source: AP)

The hostage drama forced the evacuation of nearby buildings in Sydney's central business district and sent shockwaves around a country where many people have started to turn their attention to the approaching Christmas festive season.

People standing behind a police cordon look towards Lindt cafe in Martin Place, where hostages are being held, in central Sydney December 15, 2014. (Source: Reuters)

Dozens of heavily armed police surrounded the cafe in Martin Place around mid-morning. The area is home to the Reserve Bank of Australia, commercial banks and close to the New South Wales state parliament.

Police officers gesture near Lindt cafe in Martin Place, where hostages are being held, in central Sydney December 15, 2014. (Source: Reuters)

The cafe was directly opposite a commercial television studio and footage showed several people inside the cafe standing with their hands pressed against the windows.

A woman is assisted as a group of people are evacuated by police from a building next to Lindt cafe in Martin Place, where hostages are being held, in central Sydney December 15, 2014. (Source: Reuters)

Police check buildings close to a cafe under siege at Martin Place in the central business district of Sydney, Australia, Monday, Dec. 15, 2014. (Source: AP)