Police storm Sydney cafe to end hostage siege, three dead

Hands are pressed up against the window of the Lindt cafe, where hostages are being held, in this still image taken from video from Australia's Seven Network, on Dec 15, 2014. [Photo/Agencies]

Monis was found guilty in 2012 of sending offensive and threatening letters to families of eight Australian soldiers killed in Afghanistan, as a protest against Australia's involvement in the conflict, according to local media reports. Monis was also facing more than 40 charges of sexual assault.

"He had a long history of violent crime, infatuation with extremism and mental instability," Abbott told reporters in Canberra. The prime minister did not identify the gunman.

A US security official said the US government was being advised by Australia that there was no sign at this stage that the gunman was connected to known terrorist organisations.

Although the hostage taker was known to the authorities, security experts said preventing attacks by people acting alone could be difficult.

"We are entering a new phase of terrorism that is far more dangerous and more difficult to defeat than al Qaeda ever was," said Cornell University law professor Jens David Ohlin, speaking in New York.

ON ALERT

Australia, a staunch ally of the United States and its escalating action against Islamic State in Syria and Iraq, has been on high alert for attacks by home-grown militants returning from fighting in the Middle East or their supporters.

News footage showed hostages in the cafe holding up a black and white flag displaying the Shahada, a testament to the faith of Muslims. The flag has been popular among Sunni Islamist militant groups such as Islamic State and al Qaeda.

The incident forced the evacuation of nearby buildings and sent shockwaves around a country where many people were turning their attention to the Christmas holiday after earlier security scares.

In September, anti-terrorism police said they had thwarted an imminent threat to behead a random member of the public and days later, a teenager in the city of Melbourne was shot dead after attacking two anti-terrorism officers with a knife.

The siege cafe is in Martin Place, a pedestrian strip popular with workers on a lunch break, which was revealed as a potential location for the thwarted beheading.

Muslim leaders urged calm. The Australian National Imams Council condemned "this criminal act unequivocally" in a joint statement with the Grand Mufti of Australia.

The security operation was the biggest in Sydney since a bombing at the Hilton Hotel killed two people in 1978.