A gunman is holding staff and customers hostage at a cafe in Sydney, Australia.

The Lindt cafe in the city centre is surrounded by armed police. Officers have made contact with the gunman.

Five people have been seen running from the building. It is not clear how many remain inside. A black Islamic flag has been displayed at the window.

Prime Minister Tony Abbott said it was "profoundly shocking" that people were being "held hostage by an armed person claiming political motivation".

He was speaking after chairing a meeting of the national security committee in Canberra.

report I read says the gunman is well known to the police--which hopefully sounds like he might just be an attention seeking crank who has no intention of harming people.

Just seen the latest report a huge amount of gunfire for supposedly just one guy. Looks sadly like one of the hostages killed -by whom?