UPDATED 12.10am:Â New South Wales Police are giving little away about negotiations with a gunman holding a number of hostages in Sydney's Lindt Cafe.
VIDEO: Watch three hostages escape from the Sydney siege on Sydney's Martin Place
The lights in the cafe have now gone off.
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LIVE STREAM: Siege at central Sydney cafe
PHOTOS: Hostage Situation in Martin Place
Commissioner Andrew Scipioni isn't prepared to comment on whether it was switched off as a police tactic or not at his latest media conference.
MORE: Australian correspondent Murray Olds on the siege
He says police are negotiating but won't divulge the means of communication.
"Our only goal tonight, and for as long as this takes, is to get those people currently caught in that building out of there safely.
"That remains our number one priority and nothing will change."
An exclusion zone will remain around Sydney's Martin Place tomorrow morning as police continue work to free the hostages inside the Lindt Cafe.
Police say anyone who works in that exclusion zone should work from home tomorrow.
Public transport should be back up and running as normal throughout the rest of the day.
Australia's Muslim community has released a joint statement saying it condemned "this criminal act unequivocally" and that "such actions are denounced in part and in whole in Islam".Â
Little detail in latest media conference
Deputy Police Commissioner Catherine Burn has held a media conference but revealed little detail.
Commissioner Burn says they're negotiating with the gunman but it could take some time.
She won't say how many hostages are still in the Lindt Cafe.
She's also declined to reveal what the hostage-taker's demands are.
Negotiations begin
New South Wales police say the Sydney hostage situation has evolved into a negotiation.
They say their approach is to resolve it peacefully but it might take some time.
Deputy Police Commissioner Catherine Burn says she can't reveal operations details.
There is no information on the number of hostages still in Lindt cafe.
Five hostages are free.
It's still not clear whether they were released or escaped the gunman.
Gunman gives demands to hostages
There are reports that the gunman inside the Lindt cafe has planted four bombs - two in the cafe itself and two in Syndey's CBD.
The gunman also told hostages two demands.
The first demand is an Islamic State flag, which would be exchanged for one hostage.
The second demand is a meeting with Prime Minister Tony Abbott.
Five people escape in total
Five people have now emerged from the siege at a cafe in Sydney's Martin Place.
Three males and two females have fled from the building while the faces of customers and workers have been seen pressed up against a shop window of the Lindt Chocolat Cafe.
As many as 50 staff and customers are being held inside.
Sky News has learned there are two or more gunmen inside the cafe.
It says they believe there are 13 hostages.
An Islamic flag - black with white writing on it - has been held up to the glass.
In a chilling drama unfolding in the city centre, Martin Place has been shut down and scores of police are surrounding the cafe.
Workers in nearby buildings, including the Seven Network, have been ordered to evacuate the area.
Hashtag aims to comfort Muslim community
The Twitter hashtag, "I'll ride with you" is trending globally following the Sydney siege.
The social media initiative is aimed at offering support to the Muslim community wearing religious attire who may feel unsafe in public following the hostage situation.
It's seen people take to Twitter to say which public transport route they're taking, followed by the hashtag "I'll ride with you" if there's anyone who feels unsafe being alone.
Messages of support and offers of rides to work have also flooded the site as Australian try to work together to help ease any fear of racist attacks.
NSW Premier, Police Commissioner speak - stops short of calling it a terrorist attack
New South Wales premier Mike Baird says he has full confidence in the work of police as hostages are held in a Sydney cafe.
"They today have acted decisively. They are on top of the situation and they are doing everything possible that needs to be done.
"We are incredibly lucky to have them at our disposal looking after the public in this state."
Police are urging the public to remain calm but vigilant as the siege in Sydney's CBD continues.
Contact has not been made with the suspects holed up in the Lindt cafe in Martin Place.
Commissioner Andrew Scipione has stopped short of calling it a terrorist attack.
"At this stage that's certainly something we couldn't rule out. We're not tagging it at this stage. What we've got is we have an armed offender that has a number of a undisclosed hostages in a city building."
Mr Scipione says they are still determining the motivation behind the incident.
"We have not yet confirmed this is a terrorism-related event. We are dealing with a hostage situation with an armed offender, and we dealing with it accordingly."
He says that response involves hundreds of officers.
"We've moved to a footing that would be consistent with a terrorism event."
Police have now left the Sydney Opera House, but it is still sealed off after a package was found there earlier.
There are questions over how prepared Australian authorities were for an attack.
Today's siege comes after a warning earlier this year of a terror-related attack in Martin Place - the area where an unknown number of hostages are currently being held in a cafe.
Mr Scipione says authorities had done enough to prevent such an attack.
"Well certainly if you were to look at the number of police we've had in the city, the number of officers that were on standby and the rapidness of their response, I would suggest that it's as good as you will get anywhere."
Lindt Chocolate Cafe issues statement
Via Facebook:
"We would like to thank everyone for their thoughts and kind support over the current situation at the Lindt Chocolate Café at Martin Place. 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. The matter is being dealt with by the authorities and we are waiting for any updates from them."
Radio station takes threatening call from Martin Place
A prominent Sydney radio station has received a call from Martin Place.
Sky News reporter Cameron Price says it's believed the caller is one of the gunmen inside the Lindt Cafe.
"He has made threats and also demands. Now we cannot confirm these reports at this stage, but we understand that authorities are taking this call extremely seriously."
The hostage-taker reportedly made threats to the radio station of other explosives around Sydney.
Ray Hadley, a 2GB radio station host, claimed the hostage-takers want to talk to Australian Prime Minister Tony Abbott live on air, the Guardian Australia reported.
A reporter for the newspaper at the scene said a man who appeared to be a priest was escorted into the cafe.
Abbott urges calm
VIDEO: Tony Abbott's press conference in Canberra
The Australian Prime Minister is urging calm, as the Sydney siege continues.
Tony Abbott has just addressed media in Canberra.
"Australia is a peaceful, open and generous society. Nothing should ever change that, and that's why I would urge all Australians today to go about their business as usual."
Earlier, Mr Abbott issued a statement, describing the siege situation as "deeply concerning" and saying the National Security Committee of Cabinet has convened for briefings.
"New South Wales Police and the Australian Federal Police are currently responding to a reported hostage-taking incident in Martin Place in Sydney," the Australian prime minister said.
"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."
New South Wales Premier Mike Baird has released a statement saying his "thoughts and prayers" are with those affected.
"I have spoken to the Police Commissioner Andrew Scipione and have full confidence the NSW Police are working effectively to resolve the situation," he said.
Nearby buildings include NSW Govt offices
NSW government offices, including Premier Mike Baird's, are also in the vicinity.
Two women, whose faces are pressed up against the window, appear to be holding up the flag.
Police have closed off Martin Place between Macquarie and Elizabeth streets, and Martin Place train station has been cleared.
Police have cordoned off the area to about 150m and a special police operations unit is outside the building.
Schools in 'white level lock out'
Sky News is reporting Sydney schools are now in what's called a 'white level lock out'.
Schools have been notified of the siege in the CBD.
No school group is to leave their grounds.
Newsroom evacuates
The Seven Network's Martin Place studio in Sydney's CBD has been evacuated as a hostage drama unfolds at a nearby cafe.
Seven's coverage of the siege at the Lindt Chocolat Cafe is being telecast via Melbourne.
The Martin Place studio is Seven's main newsroom and home to breakfast show Sunrise and The Morning Show, which was on air when news of the siege broke about 9.45am (AEDT).
It's directly opposite the Lindt cafe.
It's unknown if any Seven staff are among the hostages.
A Seven representative says one of its news reporters, who's an expert in terrorism, has identified the flag being held up in the window.
He says it's believed to be an al-Qaeda flag, adding Martin Place has become a ghost town.
There are reports that the police have been taken inside the Channel 7 building and "are most likely in surrounding building to gain a better POV".
"Police are assuming the gunmen could be carrying explosives in a backpack but this is still unconfirmed," Joel McKay, who appears to be live tweeting the incident, posted.
Queensland reacts
Queensland has ordered every cop onto the streets, as Australia reacts to the Sydney siege.
Police Commissioner Ian Stewart says there's no indication or intelligence that any attack is planned for Queensland.
He briefed cabinet this morning on what he'd been told, and says he has offered support to New South Wales Police.
Eyewitness accounts
Aucklander Matthew Dale, 21, works in a restuarant on Bligh Street, near Martin Place, and was walking to start his shift when he came across the cordon.
He was standing in a crowd of about 200 people when he spoke to NZME. News Service.
"I can see a lot of armed police, dressed in black who look like the Armed Offenders Squad in New Zealand. There are detectives, too, in suits."
He said sirens were ringing out constantly as more police and officials arrived at the scene in Martin Place.
He said the atmosphere was tense and people were talking about the reports of an explosive device being inside the building.
"I'm right outside the New South Wales Government Building, which is concering. It is a little bit scary."
He said he hadn't be told to evacuate the area, but didn't expect many customers would be coming to the restuarant today.
New South Wales Police are urging caution and calm, two hours into the Sydney siege.
13 people are believed to remain hostage inside the Lindt Cafe in Martin Place.
Sky News reporter Cameron Price says police are describing it as an 'armed incident'.
"The information that we have is that there is one armed hostage taker armed with, we understand, a shotgun, perhaps a machete and it's feared potentially an explosive device."
Office worker Rosemary, was unable to get into work today.
"I got pushed back by the police as I walked up the steps.
"It was all obviously happening as I was approaching the steps to go up to the building but my work colleagues are all up there and it's a bit worrying."Â
New Zealander Anita Smith works close to the cafe.
She says they got an email this morning saying there is a terror threat in Martin Place.
"So we've all bee advised to stay in the building and then about an hour ago we were told our revolving doors to our building have been locked and nobody is to come or go.
"At this stage, because I think we haven't been outside and we're not right in the thick of it, we're quite calm. But a lot of people were very nervous, contacting friends and family back home."
Morning terror raids
An operation in Sydney's northwest ended with two men in custody on suspected terrorism-related offences this morning.Â
The Australian Federal Police have confirmed a 25-year-old Beecroft man has been arrested by the NSW Joint Counter Terrorism Team, and the other man is believed to have been taken into custody earlier.
The AFP says the arrests are part of continuing investigations into the planning of a terrorist attack on Australian soil.
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