LARGE sections of Sydney's CBD were placed in lockdown after at least one gunman stormed the Lindt Chocolat Cafe in Martin Place and took a number of customers and staff hostage.
A Islamic Shahada flag was then placed in the window of the popular Sydney cafe sparking a massive security operation which made headlines around the world.
Reports of the number of people inside the cafe fluctuated throughout the day, but it was understood at the time of print that up to 30 people could have been taken hostage.
Three hostages managed to flee through a side door more than six hours after the siege began.
A further two fled through the cafe's front entrance an hour later.
It is unclear whether the five hostages were released or managed to escape.
Channel 7 reporters and cameramen, in their studio across from the popular cafe, captured footage of a man inside the cafe yesterday wearing a black headband with Arabic writing on it.
Hostages could be seen with their hands held high in the air and others with their bodies and palms pressed against the cafe's floor-to-ceiling windows.
Shortly after the siege began, at 9.45am, hostages could be seen holding an Islamic Shahada flag against the cafe's glass windows.
Hundreds of heavily armed police surrounded the area while thousands of workers across the city were sent home and some of the city's major buildings including the Sydney Opera House, NSW Supreme Court, NSW State Parliament and State Library evacuated.
NSW Deputy Police Commissioner Catherine Burn said late yesterday (Monday) negotiators had made contact with someone inside the building but would not reveal if that was with the person responsible for the siege.
"We do not have any information to suggest anyone has been harmed at this stage," she said.
"Police negotiators have had contact and will continue to have contact.
"We now have numerous police working on who this person is and what those motivations might be.
"Those motivations are not known and it would not be good to speculate."
Prime Minister Tony Abbott, in a nationally televised address, said the motivation of the perpetrator was unknown.
He said there was an indication it could be politically motivated.
"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.
"We have to appreciate that, even in a society such as ours, there are people who would wish to do us harm.
"The whole point of politically motivated violence is to scare people out of being themselves."
Lindt Chocolat, in statement on its Facebook page, expressed their shock at what had unfolded in its Sydney store.
"We are deeply concerned over this serious incident and our thoughts and prayers are with the staff and customers involved and all their friends and families," it said.
The Grand Mufti of Australia Dr Ibrahim Abu Mohammed said he hoped for a peaceful resolve to the situation.
"We condemn this criminal act unequivocally and reiterate that such actions are denounced in part, and in whole, in Islam," he said.
"We along with the wide Australian society await the results of the investigation about the identity of the perpetrators and their underlying motivations behind this criminal act."
World leaders including United States President Barack Obama, Canadian Prime Minister Stephen Harper, New Zealand Prime Minister John Key and Indian Prime Minister Narendra Modi sent messages of support via social media.