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 Authorities have not publicly identified the gunman, but a police
source named him as Man Haron Monis, an Iranian refugee and
self-styled sheikh known for sending hate mail to the families of
Australian troops killed in Afghanistan. He was charged last year
with being an accessory to the murder of his ex-wife but had been
free on bail.
During the siege, several videos were posted on social media
apparently showing hostages inside the Lindt cafe in Sydney's
central business district making demands on behalf of Monis.
The gunman, whom hostages referred to as "brother", demanded to talk
to Prime Minister Tony Abbott, the delivery of an Islamic State
flag, and that media broadcast that Australia was under attack by
Islamic State.
Abbott told reporters the man was well known to authorities, had a
history of extremism and mental instability, and had targeted
innocent people.
"These were decent, good people who were going about their ordinary
lives ... who got caught up in the sick fantasy of a deeply
disturbed individual," Abbott said of the victims.
 Police are investigating whether the two hostages were killed by the
gunman or died in the crossfire, said Andrew Scipione, police
commissioner for the state of New South Wales.
Around 2 a.m. local time (1500 GMT on Monday), at least six people
believed to have been held captive in the Sydney cafe managed to
flee after gunshots were heard coming from inside.
Police then moved in, with heavy gunfire and blasts from stun
grenades echoing from the building.
"They made the call because they believed at that time if they
didn't enter there would have been many more lives lost," Scipione
told reporters just before dawn.
CAFE MANAGER, LAWYER KILLED
Police said a 50-year-old man, believed to be the attacker, was
killed. Television pictures showed he appeared to have been armed
with a sawn-off shotgun.
A man aged 34 and a 38-year-old woman were also killed, police said.
The man was the cafe manager, and the woman was a mother and lawyer,
Sydney media reported.
At least four were wounded, including a policeman hit in the face
with shotgun pellets. Among the wounded was a 75-year-old woman who
was shot in the shoulder, police said. Two pregnant women who were
among the hostages were taken to hospital for assessment. All were
in stable condition.
Medics tried to resuscitate at least one person after the raid, a
Reuters witness said. Bomb squad members moved in to search for
explosives, but none were found.
So far 17 hostages have been accounted for, including at least five
who were released or escaped on Monday.
 The area around the cafe was cordoned off with police tape
throughout Tuesday.
Office workers stood in long queues outside florist shops, as
hundreds of bouquets formed a makeshift shrine near the cafe, while
flags flew at half mast across the country.
Abbott and his wife also laid wreaths at the site and signed
condolence books open to the public. A memorial service was held at
St Mary's Cathedral, barely a block from where the siege unfolded.
With Australia on edge after the siege, the Department of Foreign
Affairs building in the capital, Canberra, was evacuated briefly on
Tuesday after a suspicious package was found in the canteen, police
said. It was found to be an employee's backpack.
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Leaders from around the world expressed their concern over the
siege, including Stephen Harper, the prime minister of Canada, which
suffered an attack on its parliament by a suspected jihadist
sympathizer in October. NO LINKS TO TERROR GROUPS
Monis was found guilty in 2012 of sending threatening letters to the
families of eight Australian soldiers killed in Afghanistan as a
protest against Australia's involvement there. He was also facing
more than 40 sexual assault charges.
Abbott and security officials questioned why he was not in custody
or being monitored more closely."That's precisely the kind of
question that members of the public are entitled to ask ... how can
someone who has had such a long and chequered history not be on the
appropriate watch lists and be entirely at large in the community,"
Abbott said.
New South Wales Premier Mike Baird said recently that changed laws
regarding bail conditions in such cases were being reviewed in the
wake of the siege.
A U.S. security official said the U.S. government was being advised
by Australia that there was no sign at this stage that the gunman
was connected to known terrorist organizations.
Although the hostage taker was known to the authorities, security
experts said it was difficult to prevent attacks by people acting
alone.
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 homegrown militants returning from fighting in
the Middle East or their supporters.
 News footage showed hostages in the cafe holding up a black and
white banner displaying the Shahada, a declaration of faith in
Islam. The banner has been popular among Sunni Islamist militant
groups such as Islamic State and al Qaeda.
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 that 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.
A social media movement showing solidarity with Australian Muslims
was also gathering steam.
(Additional reporting by Jane Wardell, Matt Siegel, Swati Pandey,
Wayne Cole and Jason Reed in Sydney and Mark Hosenball in
Washington; Writing by Dean Yates and Paul Tait; Editing by Will
Waterman; Editing by Will Waterman)
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