Two people inside the Lindt Chocolat Cafe were seen pressed up against the windows holding a black flag with Arabic writing early in the siege, which began about 9:45 a.m. local time. The flag appeared to say: “There is no god but Allah, and Muhammad is the messenger of God.”
It was not an Islamic State flag, but it was initially confused as one in news reports and on social media.
By evening, however, local media were reporting that the gunman was trying to obtain an Islamic State flag and wanted to talk to Abbott.
The gunman claimed to have planted four bombs, local media also reported. Authorities declined to "speculate" about reports of explosives.
"I can`t speculate on what may or may not be, and that would be very unhelpful at the moment," Deputy Police Commissioner Catherine Burn said at an evening news conference. "At the moment we know that the person we are dealing with is armed."
She declined to call the incident a terrorist act. "We still don`t know what the motivation might be," Burn said, adding that authorities "want to resolve this peacefully."
In the late afternoon, police said fewer than 30 people were thought to be held captive at the cafe, which is in the district of Sydney that includes courts, the Parliament of New South Wales state and the Reserve Bank of Australia.
Businesses and courts in the neighborhood were evacuated and closed for the day. Aside from the chop-chop of helicopters overhead, there was an eery quiet, pierced with sound of sirens. Surrounding streets were filled with police cars, ambulances and firetrucks.
The iconic Sydney Opera House, less than a mile away, also was evacuated, with local media reporting a suspicious package there.
As the siege passed its seventh hour, five hostages went free -- three after 4, and two more about 5 p.m. It was unclear whether they escaped or were released.
One male hostage was hospitalized in satisfactory condition, the Associated Press reported. But Burn said authorities did not think that anyone had been harmed during the incident.
A reporter for Channel 7, Chris Reason, said on Twitter that police had allowed him to return to the newsroom near the scene, which apparently gave him a view inside the cafe.
"Police have allowed me back into Martin Place newsroom - gunman is clear - white shirt, black cap, unshaven, holds poss pump action shotgun."
Reason continued, "We`ve counted around 15 hostages ... mix of women, men, young, old - but no children." He also reported that the gunman was rotating the hostages, forcing them to stand against the windows for up to two hours at a time.
Most hostages likely were kidnapped when they stopped for morning coffee.
One waiter at the cafe told local media he had arrived at work minutes after the siege began to find the door locked.
“I saw a guy who looked like he was overseeing everything,” the waiter, who gave his name only as Bruno, told Fairfax Media. “He was standing up while everyone else was sitting down. That`s when the police came and everyone started putting their hands against the window. There was a whole lot of people in there.”
Hours later, Bruno told The Times, "I would rather be in there with them than being out here and not knowing, you know."
A cafe customer who declined to give her name told reporters: "I literally walked up to the Lindt cafe to get my coffee, but for some reason I went somewhere else. It`s hard to believe that this is happening in our own backyard."
As the day wore on, Australia`s Network Ten Eyewitness news reported that two women hostages in the cafe had phoned the station, and spoken of two bombs planted in the cafe and two other bombs elsewhere in downtown Sydney.
The women were "hysterical" and believed their lives were in immediate danger, according to the network.
The hostages also conveyed the demands of the gunman, who called himself "The Brother" according to the network: to speak to Abbott and to have an Islamic State flag delivered to the cafe. In return for the flag, one hostage would be freed.
The network said on Twitter that police listened in to the network`s talks with the hostages, and "advised every step of the way."
Australian Muslim leaders denounced the gunman. The Australian National Imam Council and Ibrahim Abu Mohamed, the nation’s grand mufti, said in a statement that they “condemn this criminal attack unequivocally and reiterate that such actions are denounced in part and in whole in Islam.”
A well-known radio broadcaster, Ray Hadley, said he had received a call about 1 p.m. from a hostages in the cafe.
Hadley said he could hear the gunman in the background, giving instructions to the hostage, a young man.
Hadley, from the popular 2GB talk-back radio station, said the hostage-taker was talking about “other operatives” and spoke of a password.
“They talked about a password they would give me in 10 minutes. I have no idea what that means, what it`s about,” Hadley said on air about 1 p.m. “I could hear the person in the background giving instructions to the young man I was talking to.
“The young man, remarkably, was quite calm, quite calm, and he was quite happy for us to have his phone number and said, ‘I want you to ring me back in 10 minutes for further instructions from the man holding us hostage.’”
Hadley said the gunman wanted the hostage to deliver a message live on the radio, a demand Hadley rejected.
“I wouldn`t allow that to happen. I told the hostage it would not be in his best interest or my best interest to allow that to happen because I`m not a trained negotiator, I don`t have any expertise in this. There are people who will talk to both the hostages and the person holding the hostages and they will be knowing what to do,” he said.
Burn, the deputy police commissioner, said the number of hostages remaining was “less than 30.”
Shortly before 6 p.m., police said they had been in contact with the gunman, but gave no details.
Late Monday, a group describing itself as "Asawirtimedia" said on Twitter: "Who started the war? Do not weep now!" The tweet attached a photograph of the Australian flag and comments from Abbott as he announced that Australia had joined a coalition of forces against Islamic State and was launching air strikes in Iraq. The tweet highlighted Abbott`s quote, "IS has effectively declared war on the world."
There was no way to confirm whether the group had any relationship with the gunman in the cafe, however.
Another Twitter message from the group said: "Before that Australia is involved in the killing of our children, you are safe, but now it is different"
Late in the day, New South Wales Premier Michael Baird urged the public to carry on with their lives. "The police is being tested, the public is being tested, but whatever the test, we will face it head on, and we will remain a strong, democratic, civil society," he said.
Sydney cafe hostage-taking
New South Wales state police gather outside the Lindt Chocolat Cafe in Sydney, Australia. (Dan Himbrechts / European Pressphoto Agency)
James Brown, an Australian security and intelligence analyst, said the scenario "doesn’t bear the characteristics of propaganda-style terrorist attacks,
“For a start there’s no coordinated media campaign, no one has claimed responsibility yet, the message behind the attack isn’t very clear, and there’s been no violence other than the taking of hostages yet," said Brown, who is with the Lowy Institute think tank.
"This guy has had a lot of media attention and hasn’t done anything. So it’s unlikely that this is someone who has come in to Australia from a terrorist group, certainly the ones that I’m familiar with, and it’s unlikely that this is someone who has had extensive training from a terrorist group.”
Brown said his "best guess" was that the gunman could have personal reasons for his actions, or could be mentally unstable.
The incident comes a few months after Australia carried out what it says was an unprecedented counter-terrorism raid that Abbott said was a response to an alleged plot to kill members of the public.
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Booth, a special correspondent, reported from Sydney and Dixon from Kenya. Staff writer Lauren Raab in Los Angeles contributed to this report.
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