Gunman Holding Hostages in Austrialia's Sydney

Office workers are evacuated from their buildings as a siege is underway at a Lindt cafe in Martin Place in the central business district of Sydney, Australia, 15 December 2014.

A few dozen people are being held hostage by unknown gunmen in a cafe in downtown Sydney, Australia.

Five of the people inside have left the cafeteria according to the latest report, and police is due to  interrogate them.

No-one has been wounded, but the exact details cannot be disclosed for operational reasons.

TV footage has shown there are at least two gunmen are inside the Lindt cafe. Earlier most media outlets reported the hostages were forced into leaning against a window holding up a black flag with Arabic writing.

"It's not God, but Allah and Muhammad is the messenger of God," the inscription reportedly reads, local media outlets quoted by a Bulgarian National Television correspondent.

An employee of 7News TV channel has tweeted that the hostages are actually holding "an ISIS flag". But the image apparently differs from the one used by the Sunni militant group Islamic State (IS).

Australian PM Tony Abbott has said the incident is "terrifying," but has urged calm.

The gunman has demanded talks with Abbott, but the PM's response is not yet known.

Lindt says at least 10 employees and 30 customers are thought to be inside.

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