Baku. 15 December. REPORT.AZ/ Hundreds of armed police have sealed off the normally busy Martin Place in Sydney's central business district.
At least three people have been seen inside the cafe with their hands up against a window, and holding up a black flag with Arabic writing.
Australian Prime Minister Tony Abbott has described the incident as "deeply concerning".
He said it was not yet clear who was behind the incident but that it could be politically motivated, and that the National Security Committee had been briefed, informs Report citing BBC.
"I can think of almost nothing more distressing, more terrifying than to be caught up in such a situation, and our hearts go out to these people," he said.
New South Wales Police Commissioner Andrew Scipione said the situation was not being treated as a terror incident, but confirmed there was "an armed offender in the premises holding an undisclosed number of hostages".
He said the situation was contained in Martin Place - dismissing various reports of other incidents around the city - and that police were "doing all we can to bring this to a peaceful outcome".
But he said police had not been in direct contact with the suspect.
Martin Place is a public pedestrian thoroughfare through the heart of Sydney, joining its parliamentary, legal and retail districts.
It is full of media, members of the public and the police, with what appear to be anxious colleagues of people trapped inside the building waiting for news. Several surrounding blocks are cordoned off.
Police are at this stage not giving media briefings at the site - dozens of police cars have arrived at the scene, with more continuing to come.