An armed assailant holding hostages in a Sydney cafe forced his captives to hold up a black flag with white Arabic writing in the window.
Australia, a staunch ally of the United States and its escalating action against the Islamic State in Syria and Iraq, is on high alert for attacks by home-grown militants returning from fighting in the Middle East.
Pictures showed a black and white flag similar to those used by Islamic State militants in Iraq and Syria being held up by what appeared to be a staff member and another woman.
Local media reports said the flag was the Shahada, a general expression of faith in Islam, a translation of which is: “There is no god but Allah; Muhammad is the Messenger of Allah.”
The hostage drama forced the evacuation of nearby buildings in Sydney’s central business district and sent shockwaves around a country where many people have started to turn their attention to the approaching Christmas festive season.
In September, Australian anti-terrorism police said they had thwarted an imminent threat to behead a random member of the public and days later, a teenager in Melbourne was shot dead after attacking two anti-terrorism officers with a knife.
Dozens of heavily armed police surrounded the cafe in Martin Place around mid-morning. The area is home to the Reserve Bank of Australia, commercial banks and close to the New South Wales state parliament.
The cafe was directly opposite a commercial television studio and footage showed several people inside the cafe standing with their hands pressed against the windows.
The nearby US consulate was also evacuated, according to an embassy spokeswoman, along with the Sydney Opera House. Tourists were being let back into the world-famous venue by early afternoon.
Major banks closed their offices in the central business district and people were told to avoid the area. Shops in a four block radius were shut.
“If it was up to me, I would storm the building,” said John, a lawyer in his 50s who was evacuated from the building where the cafe was located. “I just feel angry about it.” He declined to give his full name.
Qantas Airways Ltd said planes were avoiding flying over the central business district but were landing as normal.