SYDNEY - Hostages were being held inside a 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.
Australia, which is backing the United States and its escalating action against Islamic State in Syria and Iraq, is on high alert for attacks by radicalized Muslims or by home-grown fighters returning from fighting in the Middle East.
Australian police cordoned off one of Sydney's main business areas as live television footage showed patrons inside a cafe standing with their hands pressed against the windows. A black and white flag similar to those used by Islamic State militants in Iraq and Syria was also visible.
Dozens of police including a SWAT team were setting up and a couple of hundred people were being held back by cordons.