Police officers position themselves at a corner near Lindt cafe in Martin Place, where hostages are being held, in central Sydney
Police officers position themselves at a corner near Lindt cafe in Martin Place, where hostages are being held, in central Sydney December 15, 2014. Hostages were being held inside the central Sydney cafe where a black flag with white Arabic writing could be seen in the window, local television showed on Monday, raising fears of an attack linked to Islamic militants. REUTERS/Jason Reed

A central Sydney café is under siege by an armed assailant who has held a number of hostages inside. Some of the hostages have apparently been forced to hold the Islamic State flag by the window while a number of hostages have been seen running away from the café.

One of the hostages was seen making a hand gesture, which might have indicated that the assailant might behead the hostages. Daily Mail reported that a female hostage ran her thumb across the throat. It has been speculated that the hostage might have been asked by the gunman to make the gesture to prove a point to the camera. The website also reported that the Shahada flag seen on the scene belonged to Jabhat al-Nusra, a Syrian extremist group fighting the Assad regime.

Local television footages showed that some hostages held up a black flag with white writing in Arabic on it. Australian Prime Minister Tony Abbott, was talking to reporters in Canberra, said that there was evidence that the attack on the Lindt café had been politically motivated. Abbott called it a "very disturbing incident" and said that he understood the anxieties and concern of Australian people. Meanwhile, police have not yet been able to have any direct contact with the assailant. Reuters quoted NSW Police Commissioner Andrew Scipione saying that police had moved to footing that would be consistent with a terrorist event.

According to Lindt Australia Chief Executive Steve Loane, there are around 30 customers who have been held as hostages in the café. However, the number is also considered to be a speculated one as Loane said that he was guessing the number. The siege took place at around 9:45 a.m. Heavily armed policemen have surrounded the café in the area which is close to the NSW state parliament. Video footages showed that several people inside that café were standing with their hands pressed against the windows. A black and white flag, which looked quite similar to that of the Middle Eastern extremists group, was seen. It is learnt that the writing on the flag says "Mohammed is the messenger of God" and "there is no God but Allah." IS uses similar flags in Syria and Iraq. Cordons held back around 200 people while the fire brigade's hazardous unit and a police SWAT team were seen on the scene.

7News earlier tweeted that two people have been seen running out of the Lindt cafe at Martin Place, eight armed police outside.

#BREAKING Two people have been seen running out of the Lindt cafe at Martin Place, eight armed police outside.

— 7 News Sydney (@7NewsSydney) December 15, 2014

Contact the writer: s.mukhopadhyay@ibtimes.com.au