At least 13 people are being held hostage by terrorists who stormed into a central Sydney cafe with a gun and forced crying women to hold a black Islamic flag up to the window.
Witnesses described how a man wearing a headband covered in Arabic walked into the Lindt cafe in Martin Place and produced a shotgun from a blue bag at around 9.45am.
Shortly afterwards hostages were seen with their hands pressed against the windows holding up the Shahada flag belonging to the extremist group Jabhat al-Nusra, which is fighting the Assad government in Syria.
There are claims that the terrorists are also armed with a machete and may have explosives but this has not been confirmed by police.
One of the hostage-takers has made contact with officers saying that he has 'devices all over the city' and 'wants to speak with the prime minister live on radio', according to Ray Hadley, from 2GB.
Armed police have sealed off streets around the cafe and Martin Place station is shut. Planes have been diverted away from the city centre.
Police have handcuffed a man 200m from the cafe with reports an officer has hit [sic] foot on what appears to be a small black handgun.
The incident began just hours after a 25-year-old suspect was arrested in a terror raid in Sydney.
Officials have also evacuated the Opera House after reports of a suspicious device.Fortunately, Australia has all those gun-control laws, ensuring that the entire country is a soft-target.