AKIPRESS.COM - At least one armed person held an undisclosed number of hostages in a cafe in downtown Sydney on Monday, and Australian Prime Minister Tony Abbott said the events may be "politically motivated.

Three people escaped the cafe through a fire exit six hours after the hostage crisis began.

A flag with Arabic script was displayed through the cafe window.

The standoff gripped downtown Sydney, shutting down government offices, public transit and schools as it dragged through the day.

The normally busy and crowded business district of the city was on virtual lockdown, with hundreds of officers on the scene.

New South Wales Police Commissioner Andrew Scipione said at an afternoon news conference that "an undisclosed number of hostages'' were being held by "an armed offender.'' Some media reports said 13 people were being held hostage, but there were conflicting reports of larger numbers.

"We have moved to a footing of a terrorism event,'' Scipione said.

Television and still images from the scene showed several people inside the cafe holding their hands up in the air, pressed against windows, with a visible black flag bearing what appeared to be Arabic script.

"It's a flag that we've had people looking at. We're still trying to work out what it stands for,'' the police commissioner said.

He said that police had not established direct communication with the hostage taker.

"We do not know the motivation of the perpetrator,'' Abbott said in a televised address. He called it "very disturbing.''

"We don't know whether this is politically motivated, although obviously there are some indications that it could be," he said in the nation's capital, Canberra. "We have to appreciate that even in a society such as ours, there are people who would wish to do us harm."

Abbott earlier said in a statement that local and federal police were responding to the "reported hostage-taking incident in Martin Place in Sydney.'' He called it "obviously a deeply concerning incident'' and said the national security committee of his cabinet was meeting on the situation at the Lindt Chocolat Cafe in Martin's Place in the city's central business district.

The U.S. Embassy in Australia's capital, Canberra, confirmed a "security incident involving at least one armed person at the Lindt Chocolate Café in Martin Place.''

The embassy in a notice posted on its Facebook page urged U.S. citizens to avoid the area and "maintain a high level of vigilance and take appropriate steps to enhance your personal security."

The Daily Telegraph newspaper of Sydney and Sky News reported it was believed there were 13 hostages being held in the cafe. Sky News reported there was at least one armed man holding the hostage and perhaps more.

The Daily Telegraph quoted the CEO of the company that owns the Lindt Cafe as saying there could be as many as 40 people being held.

The Lindt Chocolate Cafe said "we are deeply concerned over this serious incident" in post on the cafe's Facebook page and offered thoughts and prayers for the hostages and their loved ones.