Reports: Two dead in Sydney siege

Police confirmed the siege was over after officers stormed the shop.

A female hostage stands by the front entrance of the cafe as she turns the lights off in the Sydney central business district on 15 December, 2014. Picture: AFP.

SYDNEY - Two people have died and several others were wounded in the hostage drama at the Lindt Cafe in Sydney, according to reports.

Police confirmed the siege was over after officers stormed the shop where an lone gunman had been holding an unknown number of people hostage.

Local Australian television reported that more hostages were seen running out of the cafe.

Three people emerged from the building and were followed by another two earlier in the day.

Several hostages were also seen pressing a black flag with Islamic text against the cafe's windows.

Eyewitnesses reported heavy gunfire emanating from the shop.

It's understood one hostage had been wounded and paramedics were trying to save his life.

GUNMAN NAMED

The gunman holding several hostages in the cafe has been identified as 50-year-old Iranian refugee Haron Monis.

Australian Strategic Policy Centre's Tobias Feakin said Monis was out on bail after appearing in court on sexual offences charges.

"He was arrested in April when he was out on bail for sexual offences and being accused of murdering his wife."

Monis demanded to talk to Australian Prime Minister Tony Abbott and be given an Islamic state flag.

Police are working to determine the motive for the siege.

HOSTAGE TAKING SPARKS FEARS OF ISLAMIST-LINKED ATTACK

Abbott, who has warned of militant plans to strike Australian targets, said there were indications the hostage-taking 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.

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.

"We have moved to a footing that would be consistent with a terrorist event," Andrew Scipione, police commissioner for the state of New South Wales, told reporters, declining to comment on a possible motive, the number of assailants or hostages.

News footage showed hostages holding up a black and white flag displaying the Shahada - a testament to the faith of Muslims. The flag has been popular among Sunni Islamist militant groups such as Islamic State and al-Qaeda.

The incident forced the evacuation of nearby buildings and sent shockwaves around a country where many people were turning their attention to the Christmas holiday following earlier security scares.

In September, anti-terrorism police said they had thwarted an imminent threat to behead a random member of the public and days later, a teenager in the city of Melbourne was shot dead after attacking two anti-terrorism officers with a knife.

The siege cafe is in Martin Place, a pedestrian strip popular with workers on a lunch break, which was revealed as a potential location for the thwarted beheading.

"We're possibly looking at a lone wolf who has sympathies to global jihad or someone with mental health issues in search of a cause," said Adam Dolnik, a professor at the University of Wollongong who has trained Sydney police in hostage negotiations. "This is all about attention."

Additional reporting by Reuters.