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Armed police surround Sydney cafe

Armed police have surrounded a cafe in Sydney in what the Australian prime minister has described as a "deeply concerning" hostage-taking incident.

The events are unfolding at Martin Place, a pedestrian mall in the business district of the Australian city.

It is understood that a Lindt chocolate cafe is at the centre of the incident and a photo of hostages with their hands up was posted on Twitter by Australia's 7 News.

A photo of a black flag with Arabic writing, being hung up at the window of the cafe, was shared on the news service's Twitter feed.

Sydney Opera House is also believed to have been evacuated.

In a statement, Prime Minister Tony Abbott, said: "New South Wales (NSW) Police and the Australian Federal Police are currently responding to a reported hostage-taking incident in Martin Place in Sydney.

"I have spoken with NSW premier Mike Baird and offered him all possible Commonwealth support and assistance.

"The National Security Committee of Cabinet has also convened for briefings on the situation.

"This is obviously a deeply concerning incident but all Australians should be reassured that our law enforcement and security agencies are well trained and equipped and are responding in a thorough and professional manner.

"We will provide regular updates as further information becomes available."

A man who works in the Lindt Chocolate Cafe, and arrived for work just after the siege started, said he saw one of his colleagues pressed up against the window.

Nathan Grivas told The Guardian it was already locked when he arrived.

"I didn't get a good look at them, as soon as I saw the gun all I wanted to do was get out," he said.

Vesna Zarich, a local resident, told BBC News the incident has "sent a shiver through everybody".

She said Martin Place was a busy area, with lots of office workers and tourists.

Glenn Connley, a Channel 7 journalist, told BBC News, the area is now a "ghost town" and "completely empty" for two blocks.

He said he believes there are two or three staff members inside the cafe as well as possibly 10 or 11 customers.

Martin Place, the plaza in the heart of the city's financial and shopping district where the Lindt Cafe is located, is packed with holiday shoppers this time of year.

It is home to the state premier's office, the Reserve Bank of Australia, and the headquarters of two of the nation's largest banks. The state parliament house is a few blocks away.

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